Peoplenomics: Hopi, Tribulations, and Those Darn Horsemen

Let me line up an interesting supposition for you. If Hopi Elders were right in their prophesies about the dawning of the Fifth World (#4 is arguably in serious trouble at the moment) would you change your spending behaviors and lifestyle decisions at all? This week, we'll look into some end-time views of other folks, put an imaginary $10,000 on the table to see how you would spend it, and then assess the wisdom of your decision when weighed against various possible outcomes. Prophesy's record is spotty. A strange quest on a rainy/icy weekend for what is ostensibly and economics publication? No, not at all. Economics, contrary to the prevailing social fad, is not about collecting the biggest possible piles of paper - it's about production and distribution of goods and services, and the storage of value, not the least of which is our own lives and those whom we love. As we'll see again this week, the wealth part of printed bits of paper is very transitory. To make the point, I'm holding a subscribers-only contest: How would you spend $10,000 to improve your chances of survival?

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Ham Radio Net

In case the internet ever goes down, consider a ham radio license.  No more Morse code starting in February by the look of things.  And a few readers checked in to our Saturday morning group on 3860 KHz (LSB) last weekend.  States included North Carolina, Texas, Louisiana, New Mexico, and Colorado.  If you can, join in next Saturday at 8:00 AM Central time. If you can't, click here to find out how easy it is to get a ham license.  You shouldn't worry too much about the cost of equipment, either.  Good used gear is widely available on eBay, so you can put up a globe-spanning ham station for less than $500.  Going all new only raises the bar to $750 or so...

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A few hams asked if I could put the time in Zulu Time.  I responded, I am not a Zuluist ( I will admit to UTC/Z/UST/Coordinated Universal Time/UTC only for celestial navigation and gray-line propagation calcs). I'm a Texan, so it's 8 AM East Texas (Central) time.  That's the little hand on the 9 Saturday morning if you're in Washington DC.

There's a common phrase in management circles that goes to the idea of how complicated a business is - and it references something called "moving parts."  If a business is very simple, has a single product, few marketing channels and a simple business, it is considered less of a management problem because if has relatively "few moving parts."  On the other hand, a business with complex business rule-sets, a changing regulatory environment, and so on, is said to have "many moving parts."  And, in the mergers and acquisitions departments, you might even here now and then about a deal going by the wayside because it had "too many moving parts" and was thus too reliant on existing management or specialized knowledge.

I mention this "number of moving parts" concept because it's a good way for an investor to look at the world and multitude of investment options.  I like decisions where the choices are simple and the outcomes simple - few moving parts.  For example, when I look at the growth of population globally and the demand for protein, not to mention forecasts of the end of the fishing industry before 2048, buying farm land and moving to the country was a simple decision.  While it has been an eye-opener in terms of the physical work involved, the number of moving parts to produce eggs is really minimal.  You give a good chicken some laying pellets, scratch (a mixture of grains to nibble on) and a handful of calcium (ground up oyster shells) plus clean water and reasonable accommodations, and you get 270 eggs per year, plus or minus. Single decision (what to raise), a few inputs (housing, food, water) and a single output until the chicken passes laying years, and then it heads for the stewing pot.  Simple enough.

Same with gold.  I flip over to NowandFutures.com, check to see that their M3B is still running double digits (sure 'nug, it's about 11.5% now) and a decision whether to believe the deflationists and unload gold or silver becomes really simple.  OK, so there are a few more "moving parts to the decision" - my point is that it is a relatively simple thing to observe and react to.

Analysis of a computer giant, like IBM, on the other hand, has a lot of moving parts. They have hardware, software, and a lot of leasing activities. And lots of analysis.  More than 9-thousand hits in the Google news search this morning as experts try to look at all the moving parts and figure out how Big Blue outperformed. One of the area that seems to have hurt Blue was the hardware section - and since they unloaded Lenovo (think ThinkPads) they have continued to evolve out of the "standard PC" business.

So would I buy Blue today?  Well, no. First, they don't meet my "few moving parts" concept of investing.  They're big and diversified, and while that's grand for being able for the company to survive over time, large diverse companies usually don't see the "big pop" that a niche specific company can experience - and that's where real money can be made.  Blue is stable to the point where the stock price has less fluctuation than my checking account on a 52-week, percentage basis.  If I'm going to invest in something, I like something with big - no make that HUGE - upside potential.  Can IBM double in size in the next three-years?  Of course.  But, the odds of me winning the Texas Lottery about about equal, as I see it.

Wall Street doesn't agree.   The Market Cap of Blue ($149.81 Billion) is 67.2% higher than trailing 12-month sales revenue.  Think about this:  It's like buying a share of a lemonade stand that has $100 in sales, yet has been bid up to $167.20.  With an EBITDA of $17.47 billion, the "lemonade stand"  equivalent would be $19.50 of profits for $100 of sales, and so the question to my lemonade-making mind is: "Would I pay $167.20 for a lemonade stand making $19.50 profits?"  "Not I, said the little red hen," to put it in farmerly terms.

IBM is a fine, well-managed company, but its bigness is both a blessing and a curse, depending if you're a long term buy and hold type, or a wild-eyed speculator like me.  I'm always looking for companies that can quadruple their size in two years and I'm willing to make some really longshot bets, or at least I used to. 

Could IBM quadruple its size, at least compared to another Dow 30 company like Boeing? Boeing only makes $8.90 for every $100 of "lemonade" but the market has only bid it up to about $117.73 its hypothetical $100 sales.  I know this may seem like a quirky way to look at stocks, but in the end, stocks are just a piece of paper saying you are a (very small) part-owner of a lemonade stand.

I'll let you hold the paper.  I'd rather own the lemon tree grove and hold non-paper "money" thanks.  Fortunately, this is not advice, just a confessional.

41-killed so far by some reports. Worth watching: The tide of insurance claims.

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As the Midwest warms up (at least a tad) we notice that flood warning remain for parts of Louisiana.

We notice that Hugo Chavez has installed himself as something approaching a deity or King in Venezuela with reports that the National Assembly there has given him the power to "rule by decree."  We look at this as the South American equivalent to how the Bush administration, backed by the republicorp CONgress gave similar powers to the White House.  Except, naturally, (being more "democratic and all) we don't call it "decrees."  We call them "signing statements."

While outfits like the American Bar Association have questioned their legality (e.g. signing statements, not Chavez's use of decrees, silly!), we don't have to worry about that now because anyone arrested for suspicion of terrorism may now be tried by a military court and has no recourse to civilian courts.  There, don't you feel better that you don't living in Venezuela, which is ruled by decree now?

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Speaking of which, as a firm supporter of our Constitution, and having ultimate faith in American (daylight) jurisprudence, what do the military folks/Bush administration people have to hide that we can't try the enemies of the US in an open - public - setting?  I mean if Saddam Hussein - the chief no-goodnick of Iraq who killed thousands - can be afforded a public trial before swinging, why not the Gitmo detainees, some of whom probably are be two-bit terrorists?  "Secret trials" reek of the worst of South American politics, but then again, Elaine and I haven't bought property in Paraguay yet.

We're following with interest the tax trial in New Hampshire.  Esepcially after sending in our quarterlies this week.

A reader sent in a note yesterday remarking that it was interesting about the UFO reported in the area of the US hit by an ice storm this week.  The note went on to ask whether the appearance of a reported UFO over Iran might not mean something is about to pop there?

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YouTube video worth watching on the Chicago UFO sighting in November. Remember, this happened in November and wasn't reported until just after New Years.

Thursday January 18, 2007

Low Inflation - for Now

The Cost of Living for December is out today.  From the BLS report:

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in December, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The December level of 201.8 (1982-84=100) was 2.5 percent higher than in December 2005.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.2 percent in December, prior to seasonal adjustment. The December level of 197.2 (1982-84=100) was 2.4 percent higher than in December 2005.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.1 percent in December on a not seasonally adjusted basis. The December level of 117.1 (December 1999=100) was 2.4 percent higher than in December 2005. Please note that the indexes for the post-2004 period are subject to revision.

For the 12 month period ended in December, the CPI rose 2.5 percent. This compares with an increase of 3.4 percent in 2005. Energy costs, which rose sharply in both 2004 and 2005, advanced at a 22.8 percent annual rate in the first half of 2006 before declining at a 13.4 percent annual rate in the second half of the year. Overall energy costs rose 2.9 percent in all of 2006 with the index for petroleum based energy advancing 6.1 percent, while the index for energy services declined 0.6 percent. "

As you'll read next, we're not looking for deflation any time soon... But meantime, put this all in the perspective of the following charts from the Bureau of Economic Analysis:

 

 

Winter: Economic Implications

There are not too many sites talking about it -- yet -- but I expect over time, someone besides me will start putting together the compilation of how the weather could be holding our feet to the fire on the economy later in the year.

• I've heard from a number of  folks in the local beefing business that now might be a pretty good time to "top off" what should be a good supply of meat in the freezer for later in the year due to expected price increases.  There are lots of things driving the expectation of higher prices to come.  Some are obvious - while others are not.  On the "below the public radar" we note that carcass freight rates will be going up next month. Not a big deal?  Maybe, but remember these costs get passed along to consumers.  You might want to keep an eye on feedlot reports.

• Despite the reports that corn and beans had bumper crops in 2006, that was then, and this is now. With more pressure for ethanol production, whether yesterday's late selling in corn is the end of the surge becomes another data point to watch.

• Remember, I have been saying for some time now that we might see a surprise when the consumer price index comes out tomorrow - and as if to herald that, the producer price index came out on Wednesday with hefty hikes in food and energy:

  • The Producer Price Index for Finished Goods increased 0.9 percent in December, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. (Wed - G) This rise followed a 2.0-percent advance in November and a 1.6-percent decline in October. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.5 percent in December after climbing 0.7 percent a month earlier, and the crude goods index increased 2.9 percent following a 15.7- percent gain in November.

  The happy-talk about the markets was that the so-called "core rate" was only up 0.2% - meaning 2.5% an annual 2.5% inflation rate, but that core-rate thinking only works if you don't consider food and energy impacts.  Which, in case no one has told you, are real costs paid by real people.  So, watch that in the numbers.

• Next, on our round-up, we have to report that the cold weather on the West coast is far from over, and in fact parts of Los Angeles (as you have no doubt heard) got enough snow that I-5 north of the city has to be closed. Here in the Republic of Texas, the cold weather shut down the Alamo.

• You may be sick of hearing about the losses to California's citrus crops, or the companion stories about how there will be an impact on farmworkers, but trust me, the problems this winter snap brings will be bigger than higher OJ prices. What the impacts are on the veggie side are not known yet, but growers are uneasy, reports the Santa Maria (Valley) Times this week. Not to worry; we will know soon enough as higher prices start showing up on the store shelves near you.  Then the extent of damage should be known. My L.A. friend the Gold Trader plays down the snow in his region and keeps pointing to the USDA crop reports, which may be starting to reflect the current round of ice storms.

When the new report on Consumer Prices comes out keep in mind that government economic reports are trailing indicators and that when it comes to food and energy, a collection of news events is likely as good - or better - as a guide to future expectations.  This morning's report, for example reflects December.

 

In terms of planning your budget for the second half of this year, I would pencil in food prices up 10% from where they are today based on two expectations.  The first is that the winter weather will have an impact on prices - and these should work their way up the food chain (pun intended) as the year wears on.  But, there's another factor, too.  And that's the price of oil.

 

As I've reported before, the largely Sunni Saudis seem to have kept up their part of the rumored bargain to keep oil flowing in return for a moderated US commitment to Iraq.  The Bush administration doesn't have a lot of choice in the Middle East, because while publicly the way has been about "freedom" and "liberation" of the people of Iraq, the facts hint that the oil dimension to the war is a big factor - perhaps bigger than the ideological - and I see evidence of that when here a week or so after the "surge" announcement, we read that the Saudis will be cranking up oil production.  George Bush has himself hemmed in by religious states with oil on the one hand, the the Iraqis asking for more support on another, while Congress is making noises about his war conduct.

 

Moving the War

So as Congress is seen as digging in its heels a bit on the troop surge idea (the orders have already been cut, and it's already in play, so Congress is way late on this one, we hear), the next step seems to be expanding war to Iran, or is that - as one report suggests, a "gear up for the Apocalypse"?

 

The battle of words between Iran and Israel is clarifying, too.  Iran is saying that "Neither Israel nor its bosses dare to attack Iran."  Over on the Israeli side, foreign minister Livni is calling for harsher sanctions on Iran.

 

Curiously, it seems from the small amount of reading I do, that the word Bush is appearing more, and in closer proximity to the word Apocalypse or Bush and Armageddon.  An example

 

Just to make a note of it, in the Google news search engine, a search "bush armageddon" brings us 167 responses today, while the search "bush apocalypse" brings 121. We might as well benchmark "iran nuclear"  too, at 23,180.

 

Now, none of this is anywhere near as precise as the linguistic shifts captured by our friends with the web bot project, who keep pointing at the Ides of March as when we start "releasing" emotions (or bombs?), but it'll be an interesting thing to look in on now and then as events unfold.

 

One of my friends, who is a bit of a Biblical scholar, mentioned in a conversation yesterday that he told his wife 15-years ago that "something big is going to happen in 2007" - and apparently Pat Robertson sees the second half of the year darkly as well.  He's till optimistic that we're not yet at the point where a man would have to toil and entire day for a measure of grain and oil, but he also notes that Biblical or not, we're a few more ice storms and an oil embargo away from that.

 

Regardless of your religious persuasion (if any) and the toiling a day for a measure prophesy, there's no denying the movement of the Doomsday Clock based on global warming and nuclear saber rattling.  We've been reading up on fallout, planning for a dust-proof shelter for our chickens, weather stripping the house again, and tuning up the pressure washer for possible April/May use, regardless.

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A second troop surge is expected, by the way - this one in Afghanistan, although Congressional focus seems to be elsewhere.

 

US Attorney Purge?

Well, in legal circles, there seem to be two ways of reading the recent changes in US Attorneys.  One way is to read it that US Attorneys who are not toeing the administrations line are being purged.  The other is that it's a normal rotation of what might be called patronage jobs. Whichever, it seems to have its basis in the latest iteration of the mis-named "patriot Act"

 

Democrat Diane Feinstein says the total is now seven US Attorneys out.

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While the appointment of republicorps as US Attorneys is important because they can run federal grand juries (and investigate anything they want), we do notice the administration has backed off - a tiny bit- on warrantless surveillance.  "bad laws are no substitute for good police work," Pappy used to say.  Presactly.

 

Selling Terror

I never thought I would see this, but here in the land of "me-too" journalism, I can't help but notice that Russian media are really coming down on Vlad Putin for his recent national terror alert.  Looks like Vlad and George are using the same playbook to keep the public under thumb, eh comrade?  Gotta have an "Enemy" or they wouldn't be able to promote the "You're either with us or you're against us" kind of mentality, non?  I may have to check out "Wag the Dog" again...

 

UFO

I've been telling you for some time that UFO sighting have been popping up in the bot data runs of late.  Well, here's a sighting by a respectable retired Air Force Colonel - complete with pictures over Arkansas.  Wonder if they were shooting "before and after" footage of the ice storms?

 

Sex Changing Chemicals?

What?  Sex-changing chemicals have been found in the Potomac River in DC?  Don't tell anyone this, but I hear there are sex-changing chemicals elsewhere in Washington, too.  They're called "martinis" and they appear in certain bars frequented by politicos...

 

SatZap

China has reportedly performed a satellite-zapping weapons test successfully.  Into our news morgue: I wonder if they developed it on the computers the Clinton folly arranged to have sold to China? 

 

Globalist Nightmare

Cool headline: "Candidates to Stop the Third-World Invasion: Paul, Tancredo, Hunter."  Yup. Doubt the "hidden hands" could have gotten any of them to sell US secrets to China, either.

 

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Wednesday, January 17, 2007

A Word About Redundancy

Like much of the central US, we've got more ice this morning than a busy bar on New Years Eve.  Here at the ranch this morning, we have sleet coming down and the power could go any time.  But, despite the relative cold conditions, and the fact that our main high-speed pipe to the internet is down (a private 2.4 GHz 2-mb terrestrial point-to-point system), our www.wildblue.net satellite connection (1.5 Mb down) has continued to operate fine. 

 

All of which I mention because nuisances like big winter ice storms are wonderful planning tools, to test how you would operate in really adverse conditions that might come along in the future.  Whether you worry about a terrorist attack on America's home soil, or some kind of pandemic, the case for redundancy is made again.  Our layout here is not quite perfect, but we have avoided the "single point of failure" wherever possible with two laptops (mine and Elaine;s), two routers, two pipes into the 'net, and even two widely geographically dispersed servers.  The www.independencejournal.com server is in Kentucky and the www.urbansurvival.com and www.peoplenomics.com servers are in the Dallas-Metroplex area on a double-connected, multiple power option high reliability server farm.

 

Not that we want to go to the extra expense and the somewhat slower speed of the satellite connection, due to the fact that there are satellite hops involved which slow down responsiveness, but it's on days like this that redundancy pays off.

 

Not that we're done yet, mind you.  A week ago, I ordered a new 10-kW generator head (it's really an alternator, but they're called "generator" heads despite the fact that they put out AC...) to build a major improvement on my home power system.  Sometime this spring, I'll be pulling the 10-HP diesel off the existing 6.5 kW genset, and mounting it on a new chassis to be mated up with diesel and a power-take-off fitting for the tractor.  This way, I will be able to have either the diesel engine or the tractor's power take off spin us up some power.  With several hundred gallons of diesel, I figure we're good to go.  With a spare generator head.

 

Whether you are following the government's own advice to have many weeks of all supplies to operate your home on hand, or not, there's much to be learned from reading up on how elimination of "single points of failure" are a key to high availability, high reliability system design.

 

Similarly, we recently invested in four large (55 gallon) water barrels and some plastic tarps which can be jury-rigged on the roof of the shop/office building to allow us a more or less continuous water source.  The planned-for well and city water?  The creek?  Oh sure, all workable.  BUT, each has its points of failure.  Our rural water is fine now, but what if there is a pipe failure due to any number of causes?  The well sounds good, but would it work if earth starts moving around?  Would the creek be drinkable or even flowing after a quake?  On the other hand, rain barrels worked well for hundreds of years, and that was before plastic catchment tarps and disinfecting tablets. 

 

Why all this focus on redundancy?  Glad you asked...

 

Bird Flu Revives

While Indonesia has been fighting Bird Flu, we read this morning that authorities in Japan now have their hands full with what they hope won't be a full-scale outbreak.

 

Besides being able to kill people there's a report out from the Financial Times this week that a 60-country outbreak of bird flu could knock as much as 10% off the Dow Industrials, and similar (or greater) amounts off other global indicators.

 

Once again, if you haven't read the links, our own government warns that:

Social Disruption May Be Widespread

• Plan for the possibility that usual services may be disrupted. These could include services provided by hospitals and other health care facilities, banks, stores, restaurants, government offices, and post offices.
• Prepare backup plans in case public gatherings, such as volunteer meetings and worship services, are canceled.
• Consider how to care for people with special needs in case the services they rely on are not available. top of page

Something that will be interesting to watch will be the testing of a new approach to vaccines to fight this flu: The National Institutes of Health is testing a DNA-vaccine in human trials that started this month.

 

So far this year, four new cases have been reported (116 cases were reported last year) and 3 have died, compared with 80 last year. The odds of dying if you get bird flu?  60% over the long term.

 

So, if there's a non-military problem that might justify at least a little "head time" being spent on preparations and building some redundancy into your life, bird flu is one.  Want another?

 

Comet Watch

Folks all over Australia (with clear skies) could get a look at the brightest comet in decades.  By reports, it was really spectacular...and red, as in Red Kachina although there are lots of folks who thing that had already happened.  Nevertheless, something out of the blue (pun intended) from space, could be another reason to consider your personal redundancy plans.

 

Want more?

 

Doomsday Two Minutes Closer

With all the talk about Pakistan having bombs pointed at India, Iran being on the verge of developing nuclear weapons, and with a hundred (or so) suitcase nuclear weapons missing from the fall of the Soviet Empire, the Bulletin of Atomic Scientists today will be moving their so-called "Doomsday Clock" ahead 2-minutes.

 

You might have thought that when the walls came down around the Soviet Union, that humans would have been able to chart some kind of course for peace.  But, what most folks forget is that over the long term, wars are fought over both religious and economic issues, not types of government.  Besides, as the little planet runs out of resources, there's more pressure by the day for corporatists to exploit third world resource, and more resistance from indigenous people's who, although not as comfortable as the USA's version of urban cave-dwellers in high rises, figure that their lives might not be improved by waiting in line for fast food, and living a "mental game".

 

The Bulletin of Atomic Scientists makes the official announcement at 9:30 Eastern this morning, and while they likely won't get into the drivers too deeply, they're obvious to the three or four of us rational humans left.

 

Border War Update

The latest  in the three-way low-intensity conflict between the US Constitution-supporting public, the corporatist powers maneuver things toward a freedom-busting, Constitution-burning "North American Union", and the Mexican invasion plan has a debate going on over who should perform inspections of trains of goods coming into the US from Mexico. If you haven't figured out our position on this, you need more coffee.

 

Not Enough Work?

Need more to read?  Click here for the Mogambo Guru's report (rant?) of the week.  Shouldn't you really get some work done. though?

 

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Tuesday January 16, 2007

Bread, Circuses, Headlines

This is a sort of odd day, being an effective Monday for many workers, and so we return to full-tilt boogie today in the markets.  Let's start with a hot cup of cynic's juice and before the caffeine really kicks in, we should be able to get through some of the headlines without going manic depressive or into delirious fits of laughter at the absurdity of it all.  Our friend, the Mogambo Guru, whose column will be updated tomorrow, would not doubt prescribe both courses.

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As Holmes might have put it: "You see, Watson, while we continue to see people hypnotized with football - a form of ritualized warfare on television - there's a distinct sense of denial about the real wars of the world, such as Iraq, where a debate seems to be brewing about just how many people have been killed.  The US says more than 34,000 civilians were killed in the civil war there in 2006 alone,  The UK Telegraph is a little more precise, with 34,452 civilians dead and more than 36,000 wounded in '06.  70,000+ impacted -  Fortunes of corporate wars."

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While we read with great interest that OPEC is split on whether to raise oil prices further, as they hover around $53 a barrel, I'm reminded of the well-reported rumor some weeks back that the Saudis have told the US in no uncertain terms that they we are not to withdraw from Iraq and leave the minority Sunnis undefended from rampaging Shiites.  I don't think you'd want to bet on whether the price of oil is being "directed" in such a (payback) way as to minimize the economic impacts of the pending recession in the USA in return for our commitments in the Middle East.  But, why the folks in power here in America don't just come out and publicly connect all the dots for us is admittedly suspect.

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We read that Pakistan his hitting al Qaida hideouts near the Afghanistan border, and further that Secretary of Defense Gates is in Afghanistan today.  Off in the background, I'd observe that the flow of illegal drugs from the warringstans hasn't seemed to change much (save occasional busts like the 225 pounds of heroin seized in Turkey yesterday).  That would seem to indicate that both sides are playing the drug lords this way and that and the drugs keep flowing.  What was it Jack Nicholson said in one of his flicks - with Tom Cruise if the brain's working?  "You can't handle the truth!"

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Still, with the exceptions in a couple of commodity markets, it looks like just another Day in the Empire - with the markets set to rally, at least at the open, if the futures mean anything.  And, not to throw too much cold water on my deflationist friends, but if we're entering into a big deflation, why is the price of gold still over $600 an ounce, and why is the price of corn surging to 10-year highs? 

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The CPI figures for December are due out tomorrow, and as my energy prices here at the ranch are up 8-12% (depending on whether we're talking electricity or off-road diesel) I would have to guess that a little inflation peeking through would be just the thing to keep the democorps in line in CONgress.  Upside inflation surprise tomorrow, anyone?

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A farmerly reader - who apparently shares our long-term outlook for food in general and protein in particular, writes:

"John and I watch the news pretty closely and try to keep up with things as well as we can. Of course, we've been watching the price of corn and counting our chickens. We read the news this past week and thought that maybe we'd go stock up on some cracked corn for the girls. Maybe get a little whole corn to put aside in case of need. We had decided on 4 bags of cracked corn and 4 bags of whole corn. Trying to beat the price jump that we expect to come this week, we figured we'd go in on Monday since it's a holiday for Wall Street.

Imagine our surprise when we found out we could only get 1 bag of whole corn and 1 bag of cracked corn. One of their suppliers is not able to meet demand and the other wasn't able to get through due to weather. They don't expect another shipment in until Friday, so they started rationing. They would allow 1 cracked corn, 1 whole corn, 1 equine feed, and they were out of regular hen scratch and bird seed. And there were more customers at the feed store today than I had ever seen there all at one time. We had to park at a distance and wait to get in to get our feed.

I don't think this is the last time we're gonna see this. I'm afraid we're gonna have to stop procrastinating and get those roosters in the freezer... now. We can't afford to feed non-producers."

Exactly so. And why's that?  "Distillery demand for grain to fuel cars [is] vastly understated" writes Lester Brown of the Earth Policy Institute.  As a result, we will be putting in a much larger "free ranching" area for our chickens over the next few months, to keep them eating as much natural food (and and as many bugs) as possible. 

 

Feed prices seem like they will be high for a while, and with all the freezing/icing that we've had here in the lower Midwest over the long weekend (underscored by a $500 dent from an ice-laden branch bonking the hood of my picked - dammit), my friend the Gold Trader out in LA (who is looking at opening his own firm) says the winter wheat could be a disaster, too, so that will be something to watch this week as well.

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It adds up to what? Here in the land of Bread and Circuses (or the modern equivalents, video games, microwave snackables, and football, if you like) while the price of the bread will be going up - if made of wheat or corn, anyway - we have to note that we're one step closer to the "Mark of the Beast" if a report in InformationWeek is an early warning.

 

You'll recall that many of us who are small farmers are not-exactly-thrilled with the National Animal Identification System, which was cobbled up by the US Department of Agriculture as a "voluntary system, as long as there is 100% compliance - to be able to trace any bad food back to its source.  Other than being a wet dream for the RFID promoters (and we note that the recent tainted veggies cases could not have been chipped anyway) the pitch coming is that "If chips work for animals, they might as well be used on humans."  Well, thanks, but no thanks.

 

Strangely, once the story about "Beast Marking" animals came out, I'm shocked that it wasn't (and still hasn't) be decried from every pulpit in the Nation.  But, maybe I am expecting too much of contemporary clergy.  But, aren't they supposed to keep an eye out for this kind of stuff?

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My report this morning may be a little short if things are really slow at your office and you've been spending too much time at the water cooler for comfort.  If so, you might want to pop open a great 130-page Master's thesis from Sarah Odland (Mercy College MBA) titled: "Strategic Choices for Managing the Transition from Peak Oil to a Reduced Petroleum Society."  If you're just looking for her conclusion, check page 105 of the PDF (Chapter 8 - Lemmings In-The-Know):

"It is by now obvious that world oil production faces serious constraints to expanding. Exploration and refining infrastructure is operating at capacity, yet it may not be profitable to invest in capital expansion. New oil discoveries have not offset the yearly depletion of existing fields since the 1980’s. Whether or not world oil production will peak in 2005 or 2025 is not the critical question; we have already rolled over to a sellers’ market because demand exceeds the rate at which oil can be supplied. With little sign of demand abatement from the US or Europe and skyrocketing demand from China and India, we are drawing down the capital of our oil endowment at an alarming rate. From this point onwards, we can expect supply disruptions, price spikes, and oil shocks.

 

The petroleum-based world economy has therefore reached a tipping point. Fierce competition for the remaining oil resources will increasingly drive the markets, as well as national and foreign policies. The strategic choices we make now about how the 2nd half of the world’s oil should be used will determine how violently and abruptly we descend Hubbert’s Peak."

Also significantly, she points our some serious global behavioral hurdles to getting from here to whatever comes next.  In headline form, these include:

• Acknowledging the Elephant: Aligning Perception with Reality

• Recalibrating Expectations in the Persistence of Belief

• Gaming the System (good thinking for traders to ponder)

• Culture of Immediate Gratification

• The Value of System Shock in Change Management (without supply or price shocks, folks don't seem inclined to change much...)

Other than tell you a few more snips from today's bread and circus follies (although the report in the Houston Chronicle about a suspect being shot and killed in an apparent robbery attempt begs for comment about the value of what firearms are for), I expect a complete read of the Odland paper is probably the best thing I can table for your further deliberations.

 

I'll leave the reports on the Golden Globe awards and analysis of who-cares football to other outlets.  As Holmes might have put it:  "Quickly now Watson, the game's afoot."

 

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January 15, 2007

Congress? Irrelevant

If you were hanging on to hopes our beloved Constitution would remain intact, here's another nail in the coffin for you: Not that this will do much more than raise your blood pressure a bit, but George Bush has essentially decided to ignore Congress and the recent voting by the American public - as he has already gone ahead with  (already a done deal, actually) with his neocon promoted "troop surge" in Iraq.  Look surprised.

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Meanwhile, swinging times continue in the liberated country (which would welcome us with open arms) as two more Hussein administration officials were hung. 

 

Say, have you noticed the neocons in various articles are trying to plant the seed of an idea that Iran citizens would welcome the USA, too, should we get into it with them, too?   Except for the sad fact that people are too dumb to question it, the assertion would be laughable.

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On the home front, the administration is now not only opening mail, but looking at your personal bank and financial records, if they can gin up a national security angle.  And where's the safeguard that they need for this latest assault on Liberty?  Remember, this gang ignored the FISA Court, too....  Neocons are continuing their push bigger war/ regional war.  Speaking of which...

 

Iran Tweaks

Iran has rejected US claims that officials arrested at the Iranian embassy in Baghdad are terrorists.  You expected them to say something different?  And, it seems like the mid-March/Ides of March event from the predictive linguistics team points to bombing of Iran about then, but remember, that is speculative.  If events do go that way, then we would be looking for regional conventional/nuclear conflict in mid to late September. 

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On the other hand, our eagle-eyed readers also wonder about the deployment of stealth fighters to South Korea. Just passing through, or a third (or would it be fourth) front opening soon? 

 

Let's count: One front is Iraq, another Afghanistan, another is American's freedoms, so I would count Korea as a fourth front I guess.

 

Condi's Bummer of a Trip

In three words?  Not going well.  Just as she's trying to talk a little sense into the players, there goes Israel announcing an expansion of settlements on the West Bank, which if we understand dynamics right in that part of the world, will be the emotional equivalent of throwing gasoline on the already smoldering fire.

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Prime minister Olmert, who's talking about peace talks with Palestinians out of one side of his mouth, while OK'ing the West Bank expansion on the other, is getting rakes over the editorial coals in some media for his alleged role in the sale of controlling interesting in Bank Leumi. Family relations/conflict of interest seems to be the heart of it.

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The Palestinians, viewing the way things are going, have decided to pass on any "transitional" or "temporary" solutions to the regional loggerhead.

 

Middle East Gold  Coin Shortage

Not of the metal itself, mind you, but a shortage of gold coins is being reported in Qatar citing demand in Dubai.  Not that this will be the only story driving gold, and we note that gold is nearing a two-week high. Don't say we didn't mention this is advance, please.

 

Dollar Outlook Lower

While the Dollar has shown some resilience recently, there may be some reaon to expect that to turn around now.  One reason is the Euro is starting to seriously displace the dollar in bond markets.

 

Bots Right as Rain

A couple of readers of the web bot runs have written in about the flooding in Malaysia where 90,000+ have been evacuated, and have pointed to the Nov. 6 bot run.  OPK, that's a start, but our read of it is a little more dire.  We expect "You ain't seen nothin yet."  When we get mud and walls of water (which at the archetype level would be like a dam bursting, or something like that) or flooding of the Amazon basin, then we'll say "Told you!"  Otherwise, we watch...  Still, can't help noticing the flooding in Ohio.... And the price of food will be seriously impact, we expect, both in California and winter wheat..

 

Tax Deadline

Quarterlies due at IRS tomorrow. We're always glad to have the freedom to pay ours.  We do wish, however, the spending was in line with how Americans voted, though. 

 

Markets Closed

This is a holiday for Federal workers.  Few private sector companies take the day off.  Whether you can park for free at metered city parking depends on the awareness level of local government.  Read the meter!

 

Politics

Tom Tancredo was in Iowa this weekend testing presidential waters.  Our patriot's dream ticket: Ron Paul for President and Tom Tancredo as VP.  But, not enough money in that for the corptocracy, for sure.  And we remember what happened to the last President who tried to get America back on track with honest money....

 

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News from Elliott Wave International

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George Ure, The People's Economist

 

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