A Doublespeak Lesson

On of the greatest lessons in doublespeak I've ever had came from watching political figures back in Washington State explain how "up" in a budget was really "down" - something that's repeated over and over in headlines - and it enables the Powers That be to merrily spin public opinion, this way or that, depending on their desires.

The way it works is this:  Suppose you have a Federal Budget that is hopelessly bloated.  The sucker is sooo big that any person in their right mind would be immediately incensed and reviled by its size.  So how do you sell it?  You announce the budget is "smaller than expected" and the stoopid sheeple think "Aha!  Something good for a chance..."  Well, it's never the case.  The budget is still bloated, there's as much - or more - pork in it than ever, but because they said it was going to be a $100-trillion dollar hole over x-years, and it's down to only $99.9-trillion - a whole $1-billion in illusory "savings" you are misled into believing things got better.

Sort of like backing the guillotine up up an 1/8th of an inch while falling toward your neck - that sort of "improvement" in the situation may sound good, but you're dead shortly no matter what.

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So what triggered today's lesson in doublespeak?

Oh, just the report from OPEC that world oil demand was less than expected.  Here's a classic for your scrapbook of tricks to try in the boardroom:

"World oil demand growth in 2006 has been revised down by 0.1 million barrels per day (bpd) since the last MOMR (OPEC monthly report) to stand at 1.2 million bpd, as recent data shows weaker-than-expected demand in the first half of the year," it said in its report for September on world oil markets. "

The comments come in the same week that OPEC was out asking for $96-billion to finance new oil infrastructure. A fine example of doublespeak for the halfthink masses.

That Dangerous Constitution

George "The Decider" Bush was really ticked off yesterday - and not surprisingly - at his republicorp colleagues who have to face the wrath of Constitution remembering voters this fall.  Specifically, Bush believes his disregard for the Constitution shouldn't be questioned, as he stands by his interpretations of interrogation "laws" that essentially give the administration a free hand at whatever they want. 

When Bush trumpeted his message "It's a dangerous world," we had to agree, but not for the reasons he thinks. The danger is to our beloved Constitution, due process of law, and respect for the Geneva Convention, which we would have to interpret as disallowing use of depleted uranium shells, among other things.

A VERY Curious Remark

In his press conference yesterday, George Bush said something about terrorist attacks that made us sit up and take notice.  Check this out, especially at the emphasis added point:

"The bill I have proposed will ensure that suspected terrorists will receive full and fair trials, without revealing to them our nation's sensitive intelligence secrets. As soon as Congress acts on this bill, the man our intelligence agencies believe helped orchestrate the 9/11 attacks can face justice.

The bill would also provide clear rules for our personnel involved in detaining and questioning captured terrorists. The information that the Central Intelligence Agency has obtained by questioning men like Khalid Sheikh Mohammed has provided valuable information and has helped disrupt terrorist plots, including strikes within the United States.

For example, Khalid Sheikh Mohammed described the design of planned attacks of buildings inside the U.S. and how operatives were directed to carry them out. That is valuable information for those of us who have the responsibility to protect the American people. He told us the operatives had been instructed to ensure that the explosives went off at a high -- a point that was high enough to prevent people trapped above from escaping."

Bush talking about terrorist instructions on placing explosives in buildings? Placing explosives in buildings? Now think back about buildings that have fallen - in demolition-like fashion - and tell me what comes to mind.  I think you'll see why several readers flagged this as curious - perhaps darned curious.

Florida's Future in MY hands?

Speaking of crass republicorps, I somehow ended up on a republicorp mailing list here in Texas and that somehow qualifies me to receive mailings from the pretenders in power.  One piece of material arriving yesterday caught my eye.  "An important message from Florida Governor Jeb Bush" it began.  Inside, I was warned in hype befitting the infomercial crowd "The future of Florida is in my hands." Florida republicorps want me to vote absentee.

Wait a minute.  Florida's future in my hands?  I'm in Texas fercryinoutloud.  "What about States (and the residents thereof) deciding their own future," I wondered?  Then it hit me: Of course the republicorp would cross state lines to get any vote they can to keep Florida under control.  Why the people there can't even count, after all.

Bottom Line: Florida Republicans are mailing out requests for absentee ballots to people like me even though I haven't been to Florida since January 2003 - sending me a "Vote by mail request card" apparently because I am still listed as a voter in Palm Beach County.  Damn curious because their records show my TEXAS mailing address. 

I have to wonder how many republicorps will throw in an extra vote when urged by Jeb's letter exhorting us "We must not let liberal politicians raise taxes or allow government spending to spiral out of control..." 

What's are these people on?

Religious Unity

Not. Pope's in the poop for his Muslim remarks..

Mexico Storms

We've been watching the damage Hurricane Lane is doing to Mexico.  Not the year to be cruising the Mexican Pacific, we reckon. High pressure in the Atlantic is saving the US East Coast from hurricanes so far this year.

A different Mexico Warning

The State Department is now warning people about going to Mexico!

World Bank to Sucker Women, Too

The headlines look OK, until you see where it's going.  "World Bank Launches Plan to Help Women" comes the the headline based on the press release from Iraq War starter Paul Wolfowitz, turned chief World bankster.

Down at the very end of the story:

"In South Asia and other parts of the world where women are given access to formal credit markets, it is well documented that they have better repayment records than men," the bank said in a statement. "

Ah...the plan in plain sight:  Refer to our doublespeak lesson above.  "Credit Markets" is Banksterese for "debt."  So, saddle women with more debt and life will be grand.

Of course, only for the banksters.

More Bodies

Speaking of the Iraq War (which we might as well begin to call the Iraq Revolution, now), more than 50-additional bodies have turned up reports China's People's Daily.

Modern Moat?

So with the bodies piling up like cordwood, we notice the reported plan to build a trench around Baghdad in something that sounds suspiciously like a "dry moat."   Naturally, the US military in the area denies any knowledge and claims there is no such plan.  So we will bookmark these stories and check back in a year to see who's better able to tell the truth, Aljazeera & the New York Times which also reports the story or the US Military's press feeder brigades.

Crooked  Iran Nukes Report

Seems the US "report" on Iran's nuclear program is a cooked book - if you listen to the International Atomic Energy Agency. But what do they know, right?  The problem with the IAEA sending a complaint to CONgress is that the republicorps there will round file it because the neoCON's need another war to fatten up their defense contracting buddies, so they, in turn, can send in campaign contributions.  Doesn't the IAEA get it?  It doesn't take a rocket surgeon...

Next year's News

Sounding a lot like some of the issues in the recent web bot runs, we read the Project Censored list of top stories for 2007 to watch.

Peoplenomics

This weekend's report on our subscription side, www.peoplenomics.com, will be a very practical one: How to design and optimize the home office.  It's a result of the work I've been doing trying to design my own "perfect office" - and it will cover everything from networking and which software strategies to follow to notes on backups and electrical power planning.  Should be interesting - and might even turn into an ebook - because there's so much to cover. A subscription to Peoplenomics is just $30 per year for online access. Click here for details.

Living on Less

Our ebook How to Live on $10,000 a year or less is just $10.  Not that you need to live this cheaply, but there are plenty of ideas in the ebook that can be applied to no matter what your income level.  Click here for the Peoplenomics Bookstore.

Time Out

In less time than it takes an NFL game to run its final two minutes, you can send a friend a note telling 'em about this site.  Even if you're a s l o w  t y p i s t.  (If you have Outlook or Outlook Express, click here).

Friday September 15, 2006

Consumer Inflation Happy-Talk - Again

The figures last month weren't bad (up 0.3% in July 2006, and up 4.1% year-on-year), but this morning's report from the government's Bureau of Labor Statistics is positively giddy:

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in August, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The August level of 203.9 (1982-84=100) was 3.8 percent higher than in August 2005.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also increased 0.2 percent in August, prior to seasonal adjustment. The August level of 199.6 (1982-84=100) was 3.9 percent higher than in August 2005.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.3 percent in August on a not seasonally adjusted basis. The August level of 117.9 (December 1999=100) was 3.4 percent higher than in August 2005. Please note that the indexes for the post-2004 period are subject to revision."

Is it really all sweetness and light?  Not by our checkbook and shopping bills, but the so-called "core rate" (e.g. the costs of living ex food and energy, which in reality no one can live without, so it's a stoopid way to look at things) was the same as last month's:

"The food index increased 0.4 percent in August. The index for all items less food and energy rose 0.2 percent in August, the same as in July. A sharp upturn in the index for apparel was largely offset by a smaller increase in shelter costs, which rose 0.2 percent in August after increasing 0.4 percent in July."

I always advise people to take the "Cost of Living" numbers with a grain of salt (and three aspirins) because it needs to be considered in parallel with monetary inflation.  While it's true that the Federal (which it's not) Reserve has swept the M-3 report under the carpet since March of this year, we can still get a taste of monetary inflation by reading the Fed's H.6 report.

It shows that not seasonally adjusted M-2 was going up at an annual rate of 4.7%

The great game is this:  Your dollar's purchasing power went down 4.7% (basis M-2) [or UP 6-10th's of one percent (basis seasonally adjusted M-1)] while prices went up 4.1%.  Big whoop.

And when your boss offers you a CPI adjustment of 3.8 %, remember that you pay income taxes on any wage increase so that you are really getting screwed like this:

$1000 per week starting wage

$1038 per week after "3.8%" increase

($ 5.70) Assumes15% income tax bracket withholding on the $38 additional per week

$1032.30 - Which means you really net only 3.23% take home increase on a "CPI adjustment" of 3.8 %

Is this a great country for tax collectors, slick salesmen and corporate shysters, or what?

Oil Attack Foiled

The second most important news item we've picked up on today is the report out of Yemen that an attack on an oil refinery has been foiled.  And, oh yes, in keeping with my fears about the week before elections being a critical window for terrorists, we note that Yemenis go to the polls in five days. Yes, I'm concerned about the last week of October and first week of November here in the US.  Some other highlights of the Religion and Resource War today:

The Pope's Foot

The Vatican's PR crews are doing damage control today after the Pope stuck his foot in it with some commends about the Prophet and the Muslim faith earlier this week.

Body Count

The Iraq body count is up to 40-something today, depending on which news sources you read. 129 dead in Iraq's civil war - if you don't mind me calling it what it is - in three days of counting.

Bankster Boycott

While it's impressive that as many as 80 non-governmental organizations (NGO's) are boycotting the International Monetary Fund and World Bank meetings in Singapore, the move is, in my view, pointless.  While it might raise public awareness of the "banksters run the Universe" belief, the actual economic clout is close enough to zero that the banksters won't change.  Wish it weren't so, but "thems is the facts."

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Corporations are measured by stakeholders (except by me and darn few others) by only one metric: How much cash can then sift down to the bottom line.  Social responsibility?  Quality of the workplace and minimized impact on the planet's biosphere?  You nuts, or something? 

The core problem is that most people secretly do vote with their wallet.  The Great Awakening which is ongoing at less than a snail's pace, is that if you're lightly treading on the earth, but make your investments solely by measuring cash to the bottom line, you're rewarding crooked/cockeyed accounting which is not giving the big picture of corporate performance.

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Singapore, meantime, is stifling opposition the simple way - Not letting activists into their country.  Corporate/bankster suck ups.

High Roller

The NYSE says a rogue metals trader lost $20-million for Citigroup circa 2003. The part that caught my eye was the report the trader involved had more than $373-million in open positions at one point.  Youch.

Nystrom's Latest

By friend Michael Nystrom of www.bullnotbull.com sends this:

"Hi George,

Here is a follow up to my article last week on real estate, submitted for your review:

Good News For People Who Love Bad News - Real Estate in Boston vs. Seattle

http://www.bullnotbull.com/archive/good-bad-news.html 

Have a great weekend!

Michael"

Helmet Safety

What kinds of rounds with a standard issue US Army helmet stop?  Lots - especially fire from a hand gun.  Click here for a great visual story.  If I were in combat in an urban area, I'd feel one heck of a lot better about wearing a helmet after seeing these tests.

Voting Results

In yesterday's edition, we asked readers to vote on a possible name change/ brand expansion to utilize our existing www.independencejournal.com web site.  This was driven by three or four factors; chiefly the existence of the name (a good one for a new/financial site), the fact that the content would be the same as UrbanSurvival but the brand more general, and most of all because the site would be on a different server, so that we'd have two points of access to the internet.   The vote to "Keep Urban" was 204, the prefer Indy Journal was 146, and the try both names was 149. Clearly, trying the "dual content" approach will be the course of action so...

What I'm planning to do is first & foremost, keep UrbanSurvival BUT also co-publish on the "new look" site for redundancy and such.

Blown Away

Our "art department" (which I use for sales and marketing consulting gigs which require more layout skill than I've got - see my consulting page)  really blew me away last night with a "rough draft" of what the "Independence Journal" should look like.  Try this on for a "look & feel" and see what you think:

To my eye, this is a vastly more "credible" looking web site and because it is clearly news oriented, much less likely to shunned by web "security" services that have kept "UrbanSurvival" off thousands of computers that use paid "corporate filters."

So, click to vote:

Yes - I like the look

 

No, I don't like it - (see my notes)

Thursday September 14, 2006

The Quietly Building War Clouds

You probably don't like thinking about World War IV any more than I do, yet we continue to see large-scale military positioning going on globally which has the potential to be part of the "set-up" for global conflict.  First, on the purely military front:

• Chinese media report today that NATO commanders have failed to respond to calls for more UN forces to fight the Taliban in southern Afghanistan.

• Poland, however, is sending more forces in.

• While US is trying to support high participation by NATO in Afghanistan, the main US front in the Resource and Religious Wars continues to be Iraq where a Sunni leader says the entire political process in country could collapse as a result of sectarian fighting.

• Not that US policy in Iraq is successful; besides the 60+ bodies found dead of sectarian terror, we note that UN Secretary General Kofi Annan reports the Middle East leaders he has spoken with call our gunpoint democracy efforts a 'disaster."  10 more dead today in bombings and shootings in Iraq.

• As if that weren't enough, the chief judge in the Saddam Hussein trial in Baghdad is quoted as saying to Saddam: "You were not a dictator."  Naturally, this sets up the prospect of the Hussein trial turning into a policy nightmare/train wreck for the Bush administration's hand-picked Iraqi government, especially since disclosure last week of previously secret reports that clear Hussein of any links to al Qaeda. Those facts notwithstanding, US Veep Dick Cheney is trying to spin his way out of pre Iraq invasion claims that there was a link.

• Iran meanwhile continues to play rhetoric and the calendar: Iran's president says UN sanctions are unlikely on the one hand, but the US continues to push for action against Iran on the other.

While the footwork continues in the Middle East, the US and Europe are waging a wider but quiet political war in what used to be the Soviet buffer states.

• The West seems to have the upper hand in the hearts and minds - but it's really the pocketbook - battle for influence in the Ukraine. Chinese report the EU is talking about a Free Trade Area for Ukraine.

• In Georgia, as well, the US seems to be setting up some mutual defense sounding arrangements. There have been rumors in Georgia that Russia's Vlad Putin would back a coup in order to overthrow the "too West-leaning" Georgian government - but it's not true says the Kremlin.

• Then there's Belarus, where a state-like relationship with Russia may come up for a vote.  But, if it does, the US and EU are being asked in advance not to recognize the vote by pro-West opposition leaders.  Shouldn't be a problem, the US seems to acknowledge democratic processes only if they serve the corpgov interests of the US...

And then we get around to following the money:

• A key Russian central banker was assassinated today. The press reports seem to characterize this as a "contract hit" by shady financial figures.

• And the recent weakness in oil prices have led to renewed hopes in Japan among auto makers that same-old same-old growth will continue... so the Japanese market rallied.

Still, most people probably aren't worried about events between now and when open warfare seems likely to break out later this year...so long as the tock market just keeps perking along.

Peak Oil?  Not by this Guy...

Of course he's a Saudi oil exec - and the Saudis are looking for $25 billion to invest in infrastructure - and they're already pumping at capacity and, and, and...Still, the claim is the world has only tapped 18% of available supply. He may be right, but if the economics require $5000 a barrel to develop untapped, we'd call that as good as shut-in.

Soft Landing Indicator?

Home Loan Demand rose for a 2nd week says the Mortgage Banker's Association

$700 Gold

That's one forecast out today - and with gold firming up, I can only offer two bits of advice:  First, I'm not a "noise trader" so ups and downs don't bother me.  The other bit of advice for my precious metals detractors?  "Sit on it and twirl."

The Right Votes

Interesting read out of the Argus about how non-voters tend to be more liberal than their voting right-leaning counterparts.  Of course, because the non-voters don't vote, we end up with more conservative/corporatist government than the true center of America favors.

Uniformed Prayer Case

A Navy chaplain was convicted yesterday for wearing his uniform at what the Navy says was a political event, but the chaplain argued he attended in his chaplain role.

Name Change?

I need your advice.  As you know, I have a web site called  the "Independence Journal" where I've posted a bit about semi-rural life.  www.independencejournal.com.  It occurred to me (on about page 10 of "Origins of Brands" that UrbanSurvival might have more readers if the name was less...well..."Out in Idaho somewhere sounding."  (No offense to the Boise crowd...)

When I periodically get my 'serious reporter" hat on and call a government office and wish to talk with a press relations person, I note that saying "Hi, I'm from UrbanSurvival.com" doesn't seem to carry the same press "weight" as would "Hi, I'm from the Independence Journal..."

So, what would you think about UrbanSurvival changing it's name (but not content) and acting a little more like a newspaper?  Maybe even a newspaperly layout, for example - even classified ads...

Please click to vote:  (Voting Links deactivated Friday morning)

Yes:  I would like the name "The Independence Journal" better than UrbanSurvival.

 

No:  UrbanSurvival is a great name -  established brand - don't screw with it.

 

Both: Why not publish BOTH and see what works?

Thanks -

Wednesday Sept. 13, 2006

The Soft Landing Dream

A lot of news stories, and in particular the market moving kind, often leave me scratching my head, wondering what the hell is going on.  A prime example was the market's performance on Tuesday. With the Dow up more than 100 points, I scoured the headlines trying to find what is all this "good news" that more open minded (e.g. stock buyers) are seeing that I am not?

• While it is true that Goldman Sachs posted earnings, I noticed that what may have driven Goldman interest was their buyback of 60-million shares.  This is like having a "floor" under downside risk.

• Goldman's buyback aside, I looked again at the program trading statistics of the NYSE.  "Just how much of the market is computer-to-computer trading," I wondered?  Well, according to the NYSE's most recent method of accounting, the week of June 26, it was 46.4% (bottom of page 3 of the .PDF). But there's a tricky sleight of hand to be aware of: The NYSE is now only counting the sell side of a program trading.  If there's a corresponding computer buy side that's not counted.  Fortunately, the NYSE is still reporting their "original program trading" stats on the same report and we see that the week of June 26th, program trading accounted for an amazing 92.2% of the "action" on the Big Board.

• I sort of tentatively concluded that with so much computer horsepower firing off trades based on price spreads, the Tuesday pop might have been based on something as simple as the drop in the price of oil hitting pre-arranged buy levels that triggered financial euphoria. Today, oil has firmed a bit, not to mention the Saudis wanting billions of investment capital to keep their oil flowing, and Mid East producers in general wanting $94-billion overall, so the bounce yesterday may have been little more than dueling computers.

• Another possible driver?  A deep-thinking friend of mine said "Have you considered that the hurricane season is turning out much better than forecast, so insurance companies might be redeploying some of their funds?"  A good point - and sure enough, there's coverage of the notion that insurance companies are reaping the benefits of a good season - at least to date.

An opinion - and NOT FINANCIAL ADVICE - is that the markets will work around in this range for a while and then head lower.  As we march toward next year, the "corpgov" scenario for "happily ever after" (the soft landing) goes something like this:

• Next Fed meeting: No increase in rates.  This signals a short term top in real estate loan rates and sets up lower rates next year - saving ARM mortgage holders from complete disaster when lock-in and refi's come around.

• The economy cools noticeably this fall, and with it, rate pressure comes down.

• With rates down somewhat, more people decide to borrow - which gives the Fed the opportunity to have more money borrowed into existence, which while highly inflationary from the monetarists perspective, nevertheless prevents the complete unwinding of the housing market.

• Come next year, the inflation will be peeking through the numbers, but from a policy standpoint, that's a "Who cares?" as the real problem for the establishment is the elections this fall and needing to ensure that economic stability is maintained.

• If this all comes about, it'd be a fine victory for the "pro stability" crowd because against this background, I'd expect to see gold sit in a trading range of $550 to $650 until the inflation shows up very late this year or early next, a similar position for silver except that it might pop higher, quicker, because of supply/demand pressure.

That's the soft landing dream.  So what's missing from all this?

• My 15-17 week global market cycle work suggests that the odds of a terrorist attack would be much higher if we have any kind of significant market "failure" and global market entrainment which has made certain trades more or less predictable, falls apart.  If it does, and the economy unwinds faster and further than the PTB outline, then it becomes desirable from a policy perspective to have a ready scapegoat for financial disorder.  Enter al Qaida. The highest risk periods, meaning the period with the highest alignment of interests would be immediately prior to the US elections November 7th in order to "stampede voters."  We already now that such a scenario has been "test run" in Spain (2004) so the impact of terror on elections has certainly been available for study.

• This "perfect investment world" scenario also fails to take into account the impact of a major natural disaster.  While the future predictive web bot technology eyes a high risk of a major West Coast quake this fall, plus a global "coastal event" which we'd take to be a tsunami or other sea level disturbance, we present have a huge - and almost a mega - forest fire season going.  Not that we don't have some natural disasters in the making: the Los Padres fire gets headlines (it's been burning almost a week), and two are dead in the Plumas National Forest fire, fires in Washington State are gobbling up thousands of acres near Lake Chelan.  Being somewhat US-centric, MSM isn't giving as much play to Canadian fires, such as the ones in Ontario, or the persistent fires in British Columbia.

Absent a closing Dow over 11,723, I'll just sit with cash and gold - there's little out there that glimmers as an investment....except....

Soaring Farm Land Prices

One of the topics Steve Quayle and I talked about on his radio show last night was the soaring price of farm land.  You might recall that earlier this year (about February) Elaine and I were pondering the acquisition of 16-acres adjacent to our original 13 acre farmstead here in East Texas.  The price was $29,500, or just under $1,845 an acre. 

This week, my neighbor from across the road dropped by to mention how prices are soaring in these parts.  "Did you see down by Concord Church, a 7-acres piece went for $4,500 an acre?" he asked.  The site is maybe four good drives with a #1 wood from the corner of our property.  Or 17 drives, 2-irons and a sand wedge, the way I play.  "Holy smokes!" I offered. "I've made $42,500 on paper since February!"  No, we're not interested in selling.  But we are pleased with our research, no doubt about that.

There seems to be a national trend for farm land to appreciate must faster than other types of property.  For example, a recent article in an Illinois online publication talks about $4,000 an acre real estate on a big parcel. (Big parcels are generally cheaper by the acres than small.)

My personal outlook for real estate is not universally bearish.  Sure, home prices in the bubble markets are bound to come down.  But unlike residential property, farm land has some production value to it - in other words, it can literally "grow money."  Beside the $42,500 of "paper gains" we'd have it we sold our parcel today, we'd also have to count the $13,000 in cash generated by our selective logging in April.  Not that we'd sell, but that's a total potential return of $55,000 profit on a $5,500 start-up cost. Maybe that MBA was worthwhile, after all.

Quayle mentioned prices up in his part of Montana so far north of $20,000 an acres that it made my head spin.  Now, if there was only something productive I could do with this year's crop of goat weed...shoot, we'd be in fat city!

More Government NAFTA-Mexiroads

Once again, Jerome Corsi over at Online Human Events is on top of another NAFTA Super-Highway planned for Texas.  This one will snake from the Mexico (disappearing) border up to East Texas - east of our spread.

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House GOP leaders, fearing for their jobs perhaps, are effectively promising to plan for planning a plan to plan for border security.  Such drivel might play with 18-year old voters, but the republicorps have been (pardon this) dicking around with the issue since the last amnesty was foisted on America by the GOP in 1986.  Are we that dumb?  (This next story argues, Yes, we are...)

Hillary Wins

Hillary Clinton won her democratic primary in New York yesterday.  I don't know whether to chalk this up to dumb New Yorkers (hmmm...) or massive corpgov support/hype (hmmm). Maybe Americans want an elected aristocracy?

Body Bags

60 bodies have been found in Iraq in the past 24-hours.  Torture victims says a report. More bombs in Turkey, too.

Democracy Paradox

While the US is promoting (at gunpoint) democracy in Iraq, we curiously have a hard time accepting democratic decisions made by Palestinians, labeling them every which way and that.  Latest: The US says a Palestinian Unity government would, among other things,  have to renounce violence. 

Oh, like we have?

No Iran War - Yet

...at least for a while.  "OK, George, how can you be so certain of that?" you're no doubt asking.  Ah ha!  There's a headline that Iraq and Iran are signing a deal to share oil fields between the two countries.  Now, let me ask you something: Would the U.S. really go to war with Iran when we are in the midst of improving our (via our proxy state Iraq) oil ties?  Not on your live, I reckon.  Wait till that relationship sours.

Gun Raid

No right to bear arms in England, where a big gun raid was pulled off today. Gun laws or not, people still get shot and killed in the UK.

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The US Ammo shortage reports keep rolling in - this one to Steve Quayle:

"I was listening to your show tonight and heard you speaking about ammo. As you know I believe in being well armed and trained. I would like to let you know 308 7.62x51 is drying up. I contacted a friend of mine who is a big dealer in the Boston area to see what he could get and he said "(name), we are sold out and there will be no more on the way." He said his suppliers inventory's have dried up.

I feel in my heart that the times we live in now are coming to an end in the near future. "

Another Quayle listener offers this:

"Steve, The article Ammunitions Disappearing is very true. I shoot at the local hand gun range regularly. I went to buy some 45cal. and 9mm ammo last Friday Sept. the 8th. and I ended up going to 2 different suppliers to get a couple of boxes. One supplier had a couple of boxes of 9mm and the other had a couple of boxes of 45's, but that was it. I asked when they were expecting a new shipment in and they both told me because the price of metal was continuing to rise they couldn't get good buys. They said they were waiting for the price to stabilize. At the time I thought this sounded odd but I let it go. After reading your posted article I think something major is about to happen. A lot of us may own personal hand guns, but with out ammunition they are useless. This would be a form of gun control without changing any laws. Just wanted to share a personal experience. Keep up the good work I enjoy your site very much and thanks for keeping us informed."

OK, so it does smell like a cross between de facto gun control in the US and a global increase in shots fired bidding up prices, tightening supplies.

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Meanwhile, the Chief of the Air Force, Michael Wynne, thinks microwave weapons could be used on U.S. citizens, says a report.

"Has my government gone completely nuts?" asked a reader.  Come on, you don't really need to ask?

Planning the Fall Fall

With the advent of football season, I invariably want to pick up a marker and head to a China board to start mapping out plays. However, since I swore off options trading in about 2002 (when markets began to act in less than predictable ways) there hasn't been much temptation to figure out plays in the financial markets. Until now, that is. This fall seems to have the potential to generate a sizeable pile of inked paper, and while I'm the first to acknowledge that "you can't eat paper assets," I'm also enough of a realist to understand that until they go completely out of style, a shortage of inked paper can mean a shortage of food, privacy, and anything else of value. This is a paper-based world. So step out onto the field with me as I chart out a couple of possible fall plays that have emerged in my 15-18 week cycle spied in the Global Index. As a bonus, I'll give you my next terror attack predictions, too.   Subscribers can log in here.  Subscription information ($30/year) here.

Tuesday September 12, 2006

Balance of Trade Wreck

Not that it comes as any surprise to us, but here's the latest on the Balance of Trade out today:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total July exports of $120.0 billion and imports of $188.0 billion resulted in a goods and services deficit of $68.0 billion, $3.2 billion more than the $64.8 billion in June, revised. July exports were $1.3 billion less than June exports of $121.2 billion. July imports were $1.9 billion more than June imports of $186.1 billion.

 

In July, the goods deficit increased $3.4 billion from June to $73.4 billion, and the services surplus increased $0.2 billion to $5.4 billion. Exports of goods decreased $1.3 billion to $85.7 billion, and imports of goods increased $2.1 billion to $159.1 billion. Exports of services were virtually unchanged at $34.3 billion, and imports of services decreased $0.2 billion to $28.9 billion.

 

In July, the goods and services deficit was up $10.0 billion from July 2005. Exports were up $13.4 billion, or 12.6 percent, and imports were up $23.4 billion, or 14.2 percent.

 

What is amazing about all this, you ask?  Well first, it's a new record.  Secondly, the dollar jumped on news of this. Totally backasswards of what would make sense, unless even worse news had already been factored into pricing.  Or markets are manipulated.  Remember, this is rearview economics - July figures and we're in September now.

Events in Syria

Early this morning (US time) there was an attempted gun and car bomb attack on the US embassy in Damascus, Syria.  As a result, some gunmen are dead. But when I read in the reports that the perpetrators of the attack were "shouting religious slogans," the whole event takes on (to borrow a web bot term for this time frame) almost surreal or with a twist of 'unreality' about them.  It is in keeping with al Qaeda's latest warnings.

While it's possible - even likely - that I read far too deeply behind the day's headlines, I am struck by several aspects of the event which argue for something more than just the superficial read.  For example, the timing of this comes as there are reports that the US and Israel are planning to use ground troops against Iran (as reported in Bob Chapman's excellent "The International Forecaster"), there was also a report that Iran had fired some artillery shells into Iraq and that seven border guards had been captured.

That's why the Syria "attack" is so interesting.  The Western public is being asked to believe that Syrian defense forces protected the American embassy from this assault.  To me, that would - or does - make targeting Syria a more difficult when the battles with Iran actually begin, as Syria would be a natural "co target." 

You're welcome to put a small wager in the office pool whether the Middle East blow-up will happen before or after the upcoming elections here in the US.  My money is still on December. No doubt, the Iranians are playing for time with reported delays in their reprocessing program.  The Detroit Free Press reminds its readers that the Iranian nuclear program started as a gift from the USA.

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Meanwhile, off in the backrooms where strategy is planned, this week has been a mixed blessing for the neocons who seem focused on their energy (oil) quest at anyone's expense who gets in the way.  While it's true that oil dropped this week, helping the market maintain something approaching equilibrium on Monday, oil has firmed today.  More importantly, there's a report that Algeria,  may now step in an renationalize it's oil sector.. Back on the Axis list for Algeria?

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Deliciously, from PR a timing standpoint,  Saudi Arabia's US-backed government has announced a $70-billion investment in oil and gas infrastructure over the next five years while the International Energy Agency has reduced its global energy demand forecast.  And up north of us, Canada is promoting the idea that the country's oil output, which declined in 2005, would rise again as the development of Saudi Alberta's oilsands and such continues. More press releases than I can shake a mouse at.

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George Bush meantime was busy touring the 9/11 ground zero site Monday and repeating the neocon contention that the war in Iraq is necessary and it's the "decisive ideological struggle of the 21st century."  Bush is also reiterating to Osama bin Laden that "America will find you." 

I'd offer that much of the war/terror/be afraid news mongering fits too neatly with our "Religion and Resource War" construct.

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Over on the religious side, there's a little something for everyone in the headlines today.  The neocons, who have been "playing" America's religious right are no doubt pleased with a survey that says Americans are more religious than previously believed.

The Seattle Times version of the story make the interesting observation that what you think about God may be a predictor of who - and where - you are:

"People's beliefs about God's personality are powerful predictors, according to the survey. Those who found God engaged and punishing were likely to have lower incomes and education, to come from the South and be white evangelicals or black Protestants. People who believe God is distant and nonjudgmental are more likely to support increased business regulation, environmental protections and the even distribution of wealth. "

If there's been an increase in America's religious affinity, I expect there's a simple enough reason: Aging.  As us Baby Boomers get older, the reality of death becomes more real, and with that a need to look forward to something beyond war and taxes.  The After Life is, in marketing terms, an easy death bed "sell."  Works on the battlefields, too.

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At the second world congress of religious leaders in Kazakhstan, the role of religious leaders in strengthening international security is up for discussion. While the Kazakh President called for a UN Year of Religious and Cultural Tolerance, I don't see it happening.  There's far more money and power for religious (political, social, economic, etc) leaders to be made exploiting (mostly minute) differences in human worldviews, than in studying how we're all similar and how we can all improve and aspire. I'll stop here, as it's not Sunday.

Helium Shortage

We notice the odd headline today that there's a Global Helium Shortage, although we'd suggest you take the story lightly.

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More serious in the shortage department is the evolving lack of certain ammunition calibers.  One of Steve Quayle's readers sent in this note:

"Steve I live in Ft Worth Tx. Cheaper Than Dirt & Military Gun Supply are both in town, last Friday they didn't even have 500 rounds of 7.62/39. At the gun show sat. & sun. not even one box of 20 rounds! Not looking to good. Thanks for your efforts."

Another one of Steve's readers had this:

"I would like to let you know 308 7.62x51 is drying up. I contacted a friend of mine who is a big dealer in the Boston area to see what he could get and he said "Dave, we are sold out and there will be no more on the way." He said his suppliers inventory's have dried up."

We've been following the development of this civilian ammunition shortage since March.  Steve has invited me to be on his radio show tonight - 7 PM Eastern.  See www.stevequayle.com and click around till you find the streaming radio show links.

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Another shortage?  Sure.  One of my readers found a shortage of some types of cast iron cookware:

"Hey George,

I was cruising around the web on a day off and found another shortage that I thought you'd be interested in. Lodge Manufacturing, one of the main makers of cast-iron skillets, Dutch ovens and other cookware has temporarily suspended production of a large part of their catalog due to increased demand for their best-selling pieces. Cast-iron is one of the darlings of the peak oil/survivalist/back-to-the-land crowd, so I think the fact that Lodge is scrambling to keep up with demand is an interesting oddity.

details on their website at www.lodgemfg.com .

Keep up the good work,

(a very satisfied peoplenomics subscriber)"

I love Lodge cast iron cookware.  I wish they would custom make something exactly sized for my sun oven!

Monday September 11, 2006

For Markets: A Rocky Anniversary

This fifth anniversary of 9/11 is starting to look very ugly before the open of markets today.  Some of the items weighing on the markets:

• The biggest single factor appears to be the report that Japan's machine orders have come in at - get this - the biggest monthly drop in nearly 20-years.  The last time that machine orders came in this badly, the Nikkei was approaching its all-time-high near 40,000.  Today, the Nikkei is hovering under 16,000 again after blowing off 1.78% of its value overnight.

• Crude oil has dropped below $66 a barrel on the prospects of falling energy demand as the global "growth" period seems now - at best - to look like a flat period (wink, wink, nudge, nudge).  Quietly, the prospects of a global recession are sinking in to money manager's thinking and they're positioning portfolios accordingly.

• Venerable gold has been pushed below $600 - down as low as about $593 - as there has been some progress reported in talks between the EU and Iran, aimed at defusing a potential US raid on Iranian nuclear facilities.

• Last week, the National Association of Realtors forecast home sales to be below forecast through the end of this year. 

Today, we'll be watching the speeches planned by a number of Federal Reserve members in order to see which way the winds are blowing on the question of another rate hike.  At the moment, my thinking is that the Fed will have to pass on a rate hike, and may even be forced into a quarter point reduction at either their next meeting, or the one after, in order to keep the economy out of the ditch.

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A new al Qaida video is out - and promising more attacks on the U.S. and our interests.

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The larger problem for the market is, as I pointed out for Peoplenomics subscribers this weekend, that the A wave down from the internet bubble heights of 2000, which bottomed out at the end of 2002, and the following wave B bounce (which just recently topped out) lead to a very ugly picture for the next year - or longer.

Not only has the web bot project of www.halfpasthuman.com mentioned a make reduced to 1/10th, but other work, such as Gary Lammert's fractal analysis, has suggested that a decline featuring losses of 80% is not out of the question:

"If the Tuesday 5 September 2006 Wilshire's top holds as the secondary top to the 5 May 2006 secondary top (secondary to March 2000's 142 year top), a perfect terminal 29/72/72 day three phase fractal growth will have occurred - exquisitely consistent with the previously described maximal x/2.5x/2.5x saturation growth fractal extension behavior theoretically characteristic of end stage quantum fractal saturation macroeconomics.

A precipitous nonlinear valuation devolution of the Wilshire of more than 80 percent of its value would be consistent not only with the long term 74 and 148 year fractal generational saturation time frames, it would be consistent with the reality of the awful position of declining US money growth and the cusp position of an incipient large population of mortgage defaults occurring in mass. Wide spread bank failure is more than just possible. The devolution will likewise have a definable quantum decay pattern.

What is the utility of knowing that the complex macroeconomy is a mechanistic integrative process and behaves and evolves in simple and predicable summation quantum valuation patterns?

When there is an appreciation that the macroeconomy is a mechanistic saturation process that can be quantified in precise units, the necessity or tendency for scapegoating elements of society or attributing calamitous economic events to political, social, or religious event becomes mute, unnecessary, and can be identified as being irrational behavior."

The reason the Fed will be driven to a loose money policy -  e.g. no hike, and possible a surprise rate cut at their next meeting, is that Ben Bernanke is a good academic and knows from his readings on the last Great Depression what happens if a tight money/high interest rate drives down velocity of money and/or money in circulation.  The only alternative is to keep money loose and prevent a wholesale collapse of housing prices in order to maintain the value of the underlying pool of mortgages that secure so much of the nation's debt.  For Bernanke, it's a tightrope - and we're all on it with him.

Dell Weighing

Another weight on the market?  Like it needed more weight: Dell is delaying reporting and suspending a share buyback because of accounting issues.

Blair Bombs

Not shortage of protesters in Lebanon today as Britain's Tony Blair dropped by amidst heavy security. Folks apparently aren't pleased that their country went from tourist destination to a bombed out shell in 34-days.

War Crimes Clock

With the elections coming not soon enough, the Bush administration is trying to kill a 1996 law that makes war crimes punishable.  Now, why would a supposedly moral high ground outfit want to do such a thing, you you think?

Bermuda Cat 1

Florence swings by Bermuda this morning with a glancing blow.

Shaky Caribbean

I don't know if you noticed, but there was a 6.0 earthquake in the Caribbean yesterday, 330 miles southeast of NOLA.  Gotta make the GOM oil drillers a bit anxious, I would suppose.

News from Elliott Wave International

The Web UrbanSurvival Only

On to Our Chart!

Instead of our customary chart, this week you get a free peak at one of our other charts from www.peoplenomics.com - this is our "Global Markets Equally Weighted" chart:

Write when you get rich,

George Ure, The People's Economist