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Saturday January 27, 2007 07:40 CDT
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The Saturday morning "Reporting on Reporters Report"
CNBC reporter Maria Bartiromo is being defended by CNBC after questions popped up about how much time she might have spent with a former Citigroup exec. It's not that the Wall St. Journal has gone "People": - it's that there are high standards for both journalists and company execs when reporting is involved - and inquiring minds want to know....
We have our own issues, managing reporters. Oh sure, the folks who contribute news tips to this site do so for free - and as far as I know, none of them has gone jetting off anywhere with sources. But I do worry about bias and their gallows sense of humor.
Tim B of our Canadian Bureau, for example, finds things like the photo montage and charts at the Wall Street Bear interesting. I sent him a green star for the day for digging this one out.
But then he turns around and and sends me a link to an Australian story that suggested cell phones are a lot more damaging that has been previously reported. "Mobiles linked to tumours" cries the headline.
"Kills Brain Cells Better'n Beer! Maybe the phonearola industry should service mark that!" suggests our Looney-land correspondent.
Hmmm... I'm thinking to myself. "Do I put a note in Tim's personnel file, or send him a star for his efforts?" I ponder. On the one hand, he's poking fun at the cell phone industry, and on the other, he's given me a huge sense of relief that I can cheat death 20-minutes longer than expected because I don't carry a cell phone, realizing that ionizing radiation really is more dangerous than a drink a day, particularly a glass of Chianti or other liquid forms my Sicilian friends call "Italian vitamins."
Star for the day, I conclude.
Other Reporting Issues
There are plenty of other "reporting on the reporters reports" (sort of like the "watching the detectives"), if your mind isn't still fuzzy from last night.
The most interesting thing to catch my eye while scanning our collection of "reporting on the reporters" reports, was the banner ad at the top of one of the pages.
The site www.asianweek.com not only has a reporter report about Kate Beckinsale flashing a Japanese reporter, which is how I landed at the site, but I noticed the banner at the top of the page recruiting for the CIA. It proclaims "No matter the profession, America is your Job" and the alternate text says "You can serve the nation in a number of ways."
"Hmmm... " Odd, I thought. " I wonder if it's a real ad?" Sure enough, clicking the ad landed me on a CIA recruiting page, where I was tempted to "Take a CIA personality Quiz." When I got cold feet, just before entering the "personality test", but after the flash loaded, MSIE7 crashed. Probably due to all the walls I have up around my machine, Maybe I've been hanging out with the time monks, too much, I guess.
Nevertheless, the CIA personality test has me wondering if I shouldn't ask my own stable of part-time free reporters to take it. Heck, I wonder if CNBC and Citigroup know about it?
Speaking of Spies
A man the Brits have been looking at as a possible suspect in the recent polonium poisoning of Alexander Litvinenko is seriously upset with the government for its "lies, provocation, and government propaganda." "Come on! It's what they do," we'd advise him.
But that's not the real story. The main feature of the latest reports is that Litvinenko was poisoned with a polonium-laced tea bag. Our only comment there is "See? I told you coffee was better for you than tea..."
Denying Denial Department
The UN has passed a resolution condemning the denial of the Holocaust. Aimed, but not named, at Iran.
Speaking of Iran, which we don't think will be bombed until we get into the middle of March based on our linguistic time-predictive work, we're seeing more reports that North Korea is cooperating with Iran in nuclear development. However, we're really more worried about the Nk's helping with missile guidance and maneuvering systems...as there's a lot more science and machining to that than just slamming fissile materials together. One more reason to be thinking that way? The Washington Post headlines "Report: Koreas Nuclear Talks to Resume."
Meanwhile, NK is denying it has anything to do with Iranian nuclear development. We expect the next story to be someone denying denial by the NK's.
Looks like Karl Rove has been subpoenaed to the Scooter Libby trial. I bet screenwriters will have a ball with this one. I already see plot lines for West Wing and other shows - and maybe a SNL skit, developing from this, should Rove actually have to take the stand.
The Real Story?
As this is a long wave economics web site, which looks at (mainly) financial news for fun and amusement between market panics, I thought I'd reassure you that the Dow only lost 78 points this week. Kitco reports gold at $644.60 compared with $635.40 last week.
Me? Making a point? Yah think?
That's 'man-machine-interface' if you're drowsy - or user interface: New and coming to a desktop soon? Bumptop Proto video. I'm still waiting for someone to run with the awesome 3-D web navigation possible with the ThinkMap interface. Can I be a volunteer? I'm telling you, whoever comes out with the first 3-D browser interface will own the freaking web.
As promised, I went to town Friday and got the mothballs to put under my new office, to stink out the young skunk who's trying to homestead there. Sure enough, as soon as it was well past dark (about 9 PM), the little skunk who had been making his home under the floor beat a hasty retreat and hasn't come back. The mothballs, on plastic hangers attached to a piece of string, we quickly retrieved, and with me getting barely a whiff of the smell. I reckon the skunk will be moth-free for weeks.
Peoplenomics: How to Spend $10,000
Last week I raised a really interesting question: If someone handed you $10,000, how would you best spend it to improve the ultimate economic and literal survivability of your family? I reviewed some of the thoughts that went through my mind. Among these: buying a cheap piece of survival land out in some nearly forgotten rural area, turn a used RV into a "mobile escape pod", move to a foreign country, learn to play options better and parlay the $10,000 into a few million in a few weeks, or just buy a new car. I also invited responses - and because I might be prejudiced, I'm asking you to read the responses and vote for them as you see fit. The top 13 winners will receive a copy of "The Elliott Wave Principle" (20th Anniversary edition) and yes, you can vote for your own entry. An entry form is at the bottom of the report this week to keep things really simple, so let's see what's behind Door #1..
...Save big with our $10 ebook "How to live on $10,000 a year or less"
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Friday. Jan. 26. 2007
Middle East: Working Toward March Checkmate
Think of it as a huge chess board. Except that instead of the usual 8 by 8 matrix, it's more like 20 X 20. My point being that there are a lot of "moving parts" to the complexities of the Middle East picture - and watching it is sort of like watching a clockworks and trying to figure out when the alarm will go off: It's just not that simple.
For example, there's a report that a deputy leader of the Israeli Defence Ministry's mission in France has gone missing. While suicide is suspected, divers haven't found anything yet, and there are some speculative press reports that this may portend larger events to come. Whether this might presage a terrorist event, we'll just keep our fingers crossed that it doesn't.
Meantime, there's a report from the Jerusalem Post today that Iran is getting its sights set on development of an ICBM. While you might be tempted to discount the report ("It's coming from Israel..."), the story traces back to Aviation Week & Space Technology. So knowing how hungry people are in North Korea, I wouldn't be at all surprised at some collaboration on things like guidance, as the two countries seem to have similar objectives - wanting to be able to lob nukes and more, so I find the story pretty credible.
Israel's president, meantime, has been granted a leave of absence (he doesn't appear to have any interest in resigning, though) so he can deal with the sexual harassment charges, although a resignation might follow a formal indictment.
If you're watching the "strike on Iran clock", I figure the roughly 45-days until we get into the web bot project's March event range, which looks like a flattened bell curve from March 7 through maybe the 20th during which time, we will transition from tension building into a a 6-month mother-giant release period. The way I'm reading this is: The new Israeli Defense Minister, Amir Peretz, will have needed some time to come up to speed after the change of Dan Halutz. Then there'd be planning and dry runs about now.
And speaking of military leadership, prime minister Olmert says Israel didn't really lose in Lebanon - and made some important gains. That might sound good, but my read of it is that Israel lost an important marketing /'winning through intimidation' tool in the Lebanon invasion; namely that its forces would be somehow "unbeatable." A Six Days War, this wasn't.
The chess game-like moves continue elsewhere, too. We have the Iranians trying to switch issues on the International Atomic Energy Agency inspections. Their latest rap is that the iran Section boss has to go. And while keeping inspectors out, Iran is also taking delivery of high tech missiles from Russia, which is building a major energy empire while the West seems to lack countermoves.
Stepping back from the central area of our chess board, we can see not-too-far-away, in the side game, that Russia has suddenly come down with a case of "environmentalism" and abruptly says oil pipelines across the floor of the Caspian Sea are unacceptable. Gee, isn't that a conversion of convenience?
And although the dollar has been jammed up in the pre-open this morning, with a predictable retreat in oil's recent advance, the longer term outlook for the US dollar is weak, and we have the whole paper currency gang's paper hanging/ derivatives issues under discussion at the World Economic Forum. Yes, a fine stew it is, simmering on toward our march boil over.
I was pleased to learn yesterday that I'm not the only one who looks at the tea leaves and comes to the "pucker factor" that accompanies the obvious conclusions. Michael Panzner [New Laws of the Stock Market Jungle] is kindly sending me an advance of his new book "Financial Armageddon" due out March 1, in which he outlines the four 'elementals' of the coming disaster which include debt, derivatives, government guarantees, and the broken retirement system. He also posts analysis at his web site which runs along the same lines as here. Worry - with good reason - and you might think about preparing a bit....
As something to end the week on, in case you don't get around to reading the weekend edition, I'd like to explain why I don't give much space to "routine" news events (fires, abductions, murders, drug busts, etc.). Your brain, (or at least mine), seems to work best when accompanied by some thought about what you put into it.
I mean last week, when the two abducted boys were found in the Midwest and there was a whole media frenzy about that, but we didn't cover it because I thought of it as a manifestation of "Random acts of crazy perps, but not relevant to most folks, except as a hopefully avoidable, low probability event."
On the other hand, there's an almost 100% chance that you will eat today, drive a car or go somewhere, do some computing, and go scrambling for money. Work, spend, save, and so forth.
If I were to consult you on increasing personal efficiency, I would set aside 45-minutes a day for "brain feeding" and call it good. I'd recommend reading as much of the "trend driving" news as I could, and skip the non-trend "noise" stories. A recommended 30 -minute regimen might be:
It would be pretentious of me to tell you how to feed your brain, but mine seems to work best if I also set aside 15-minutes a day for some kind of intense music listening. I'm got a pretty good ear and a computer-based 48-track system in my office, so listening and paying attention to how many cymbal hits (Was that a crash or a ride cymbal in that passage?) in a song, or listening for noise gating, or estimating compression or limiter levels works to get left and right brain saying "Howdy". But that's just me.
I offer it as something to think about - you've got a brain that will give you pretty much what you feed it yet few seem to consciously make a list of "things to feed the brain." If you want to be ready for anything that comes, the time monks keep telling me "Chance favors the prepared mind." Apparently the time monks are Pasteurized.
Stop That Tuna
I sense the dry British wit in the BBC headline: "Tuna groups tackle overfishing."
But there's no accounting for what strikes the People's Economist as Universe being funny. I delighted in reading that Ireland was planning to introduce a 'green card' system for professionals. "Green" Ireland, get it? (Elaine thought I was nuts, while probably true, just added to the absurdity of it.)
What's that Darling?
I notice the headline "Hillary Replaced as Hollywood Darling" over at the Judicial Watch site. I must be terribly confused today. Neither Hillary nor Obama would qualify as Hollywood 'darlings' in my book. Jessica Simpson on the other hand...or maybe Pamela Anderson...but Hillary and Obama? Help me here...
If you have time to watch the play-by-play of the Lewis Libby trial, there are plenty of details and comments. I sort of look at this like football - worth watching about the last two minutes, maybe.
Ford in Your Future?
From our sucks, suckier, suckiest files, we see December home resales are still falling. Forget the Ford in your future question - what about a home?
Today, I will run into town and pick up mothballs "Gee, they're kinda small aren't they?" No! Not those kind...the kind that smell. "How do you know what moth balls smell like, aren't they too small to smell?" Stop it - this INSTANT!!! Back on point!. Folks who have sent me advise on how to roust the skunk from under my new office say that if I put moth balls in the area, the skunk will exit, hating the smell.
Thursday January 25, 2007
Gold And Farm Land
Where you place your bets in today's financial markets is none of my personal business - and if I gave you personal advice, believe me, it wouldn't be free - as this site has been since 1997 or so. Nope; I'd ask an arm and leg. BUT, what I don't mind doing is sharing our personal experiences and offering some of my personal perspectives that drive my investment decisions. This morning, I'll reiterate three global trends which I think are likely to help our personal returns far exceed the "average" investors.
The first item is gold. In case you haven't notice, I've been writing about gold since we bought our coin at $268 in San Francisco in 2001. Do I think gold's move is over at today's $650 level? You're kidding, right?
Anyone who has read "The Elliott Wave Principle" (Frost & Prechter) knows that when markets are moving in a direction, as when gold is moving up, the advance tends to come with a five-step advance. Wave 3 tends to be at least equal to Wave 1 and may be a multiple of it - with 1.6 times (the Fibonacci number) being common.
Now, what are the implications of this? If you click over to Kitco, where I've done some business in the past, (click on the chart) you can look at a 1995-present chart that looks like this:
Now, the thing I would ask you to notice is that from its low in the $268-270 range in 2001, notice that the price went to just touching $700 in 2006. My view (as I scream "this is not investment advice!") is that for my personal account, this sure looks like an Elliott big Wave 1. Whether it turns into a 3 or 5 wave advance is in the "Who cares?" department. But, on the right side of the chart, you can make out the corrective 3-waves down, up, down, since the $700 level was hit.
So where is gold going next? Well, at a minimum, I expect it will make another move up at least equal to the $265 to $700 run ($435 or points) and its foundation or starting point for this advance will be the correction low, which one could argue for round numbers looks like about $550 on the Kitco chart. My minimum expectation is therefore $550 plus $435 which pencils to $985.
That would be a fine and grand return, but the upside is actually higher than that. Remember, I mentioned the Fibonacci number, which is so common in Wave 3 advances? If we get that, the advance would be $435 Wave 1 advance times 1.618 and that pencils to $703.83, which when added to a Wave 3 base of $550, puts us around $1,253.83 but under Elliott it could go even higher. When folks look at how much paper is sloshing around the world today and talk of a 2x multiplier, we get to $1,253.83.
Some of my deflationist friends believe that the partial collapse of the housing industry is like a big alarm going off that inflation is dead and that it's hard to get too excited about inflation hedges. (One could argue gold's role many ways, and inflation hedging is certainly one of those.) Another friend, Michael Nystrom of www.bullnotbull.com, raises a very interesting question in an article he posted yesterday asking "Can the Fed Prevent Deflation? Does it want to?
Referring to the marriage of convenience between the banksters of the misnamed "Fed" and the government, Nystrom offers a view of history that you won't find in most books, but the facts are on his side: The Depression of the 1930's was a sort of ethnic cleansing by the Fed of non-participating banks:
I'd also like to point you at a paper cited by Nystrom and cite a few gems in it, but the author of the paper has asked there be no citations without the authors permission. So, in keeping with that, I won't cite and will merely offer a link to something you might find interesting. Hint, hint, nudge, nudge: http://www.umbc.edu/economics/seminar_papers/carlson_924.pdf
There's an alternative (Elliott) count (isn't there always?) that is less bullish for gold. It would offer that gold will not move above the $700 level, will stall here, and head for a much larger retracement down to perhaps the $400-450 range before taking off again.
If all we had going on in the world today was a collapse to one degree, or another, in housing, then such an outlook would be justified. But, one of gold's roles is as a commodity, and as such, it tends to move in tandem with oil. As an AP report from Wednesday pointed out "A late-day recovery in crude oil enabled gold futures to finish Wednesday with a gain." The folks out here in East Texas don't call oil "Black Gold" for nothing.
The other thing that continues to pressure gold is the runaway printing and ad hoc creation of fiat money, which as my friend Bart** pointed out yesterday, is merrily singing along at a 12% annual rate judging by his just about 6-sigma reconstruction of M3 that I pointed out to you on Wednesday.
There is one other huge factor at work - which may be bigger than even the commodity role, and perhaps equals the monetary role, but I'll save that (and a really cool chart) for Peoplenomics subscribers this weekend.
Farming's Bright Future
Our Canadian Correspondent, Tim B was aghast (must bve my word of the week) and drop-jawed when he stumbled over the AP story Wednesday that the "Services Sector Overtakes Farming".
The absurdity of the global shopkeeper/labor-spread player economy slapped Tim upside the head prompting him to offer a simple analysis: "Do you realize what this means?? Soon, only a few generations after retiring the farm horse, we will be able to retire the tractor! 'Cause farming will go to ZERO!"
If that happens, I expect ab workout machines and diet food my mail to disappear, too...
New report out on Wednesday from the Labor Department: And I have taken my cynical pill today, so stare at the 5th order polynomial trend line and you'll see I am expecting this measure of economic performance to show increasing layoffs in coming months.
OK, why do I expect things to look worse on the employment front? Well, for one thing, we had the report earlier this week that the Grim (Jobs) Reaper would be stalking the halls of Pfizer. Then, we know that the republicorps appoint the top brass of the Labor Department and the democorps are not in power on the Hill, so at some point, blame will start shifting. And, if that's not enough, the momentary decrease in the unemployment rate due to the permanent war for permanent peace (I reckon it about a 1% improvement, based on the increased military spending and troop levels) at some point wears off.
Falling Out of Love
John Kerry will not be running in 2008, he announced in a tear-laden senate speech..
The Ohio election rigging investigation winds on with two convictions on Wednesday. I'd bet on more to come.
Southern Democrats With Memories
Louisiana Governor Kathleen "Where's our Federal help?" Blanco is not pleased with Der Decider for failing to mention anything about Katrina/Rita victims in the State of the Union. Folks in the South have good memories.
Speaking of long Southern memories, a 1964 murder case has resulted in an arrest out of Mississippi.
I mentioned the Russia-India stealth fighter project yesterday. Today I would mention the nuclear power plant deal they've signed. In a proper cold war, Russia would have done the deal with Pakistan, so we could demonize the Pakistan government when it got convenient, and we'd get the manufacturing and infrastructure of India in our pocket. (Take that any way you will, outsource victims). But this? This is a nightmare. We're supporting Pakistan - what a jambalaya/gumbo, huh?
Death Rays Next?
Nukes for Sale
A Georgia Republic nuclear sting has yielded some bomb grade uranium - and there is probably a lot more floating around.
New Airport for NY
Stewart airport could be getting major upgrades - meaning others besides JetBlue will likely start using the place.
The Cat Bird Seat
...may get you closer to bird flu. Cat owners may be at higher risk because the cats can bring home the virus. Crap. Next thing you know, I will get word that being a cat owner makes you more likely to get mouse flu, too.
That's not exactly a joke: Hanta virus can be brought home, too. And then we have various other maladies such as cat scratch fever, yada, yada, yada.
Of course it won't happen to anyone because the report says "cat owners" and as any damn fool knows, you can't own (or herd, for that matter) a cat any more than you can own or herd a woman. Works the other way around - in both cases, both times. I mean let's be real here.
Here at the ranch things are pretty much normal. We've got to get the chicken moat finished, a larger coop built, my office finished, and a few zillion other projects. I am working to figure out a way to trade a Peoplenomics.com subscription for a few (goat) kids - need to get the goat fencing up, too.
The really interesting project today, though, will be borrowing a live trap from a neighbor to get a young skunk, who seems to have made a home under my new office, out of there and then seal everything up. I've put notes in the personnel files of the two semi-wild cats that adopted us this winter (Tom, Tom, the cat outside, and Pussilla) warning them that they face reassignment from the shop building if they continue letting skunks snoop.
"This job already stinks" wrote Tom, in his comments on the annual evaluation form. "Further, having me paw through my evaluation with my supervisor holding a burlap bag, constitutes adverse working conditions and a threatening/intimidating workplace," he wrote. Slowly, too, as these cats have terrible penmanship.
"Deal with it, you lazy feline. If you don't straighten up - and damn quick - I'll send you to Pfizer. I think you may have a catnip addiction problem?" I'll get his cat box tested.
Wednesday January 25, 2007
A reader just sent me a link to the EGGS at Princeton that seems to work - despite the front page of the site being down. so, if you want, click here and you should see the screen which will let you log onto the real time display.
Problem solved? End of mystery? Not exactly. there's a report from a reader that the Google cache of the site had gone missing...
Some Big? Or Just "Routine"?
For the past hour, I have been trying to figure out what is going on with the Princeton Noosphere Project - the so-called Global Consciousness Project. I have not been able to look at the EGGS - and there's a report on the 'net that the project was reading some very mysterious high coherence indicating that a BIG event of some kind was happening right now.
I placed a couple of phone calls to Princeton and was told that the project's funding was done - and they promised to send an an email.
So, is something big going on, or is this just a "routine" event? I've been watching gold pop up and that's not helping my thinking.
We're putting this in the same pile as our "bird flu has jumped to insects" rumor that popped up in remote parts of Asia...
SOTU: More Conflict Coming?
My current operating premise, as I sit back staring at the headlines seeking the "one great investment opportunity" that will drive me to a rich retirement, is that the US's long-time grip on "sole Super Power" status is weakening, and rather quickly. As this happens, we may be about to see some predictable outcomes such as a rapidly falling dollar, which in turn will lead to an apparent rise in gold, silver, and precious metals prices, a rapidly increase price point for domestically consumed energy, and a host of other impacts. Countervailing trends, or efforts to keep that from happening, pop up in places like last night's State of the Union address by the president.
FTo give you just one example, the president talked about how he would work to balance the budget:
Which is rich, when you get down to it because deficit spending is exactly what has been going on at record rates by the pretend "conservatives" who've been in power for the past decade. The facts on the table don't square with the political rhetoric, although in fairness, what the democorps offered in their "response" was more hyperbole than substance as well, due to the fact that both parties eat from the same corporate hands. It's just that you and I are supposed to ignore that, and believe the great myth about the economy - that the budget can be balanced and yada, yada, yada.
We ain't that dumb.
My friend Bart, over at www.Nowandfutures.com has come up with the interesting idea to see if there's a correlation between the repressed price of gold and European Central Bank sales. Quick looked surprised: The correlation is about 97%. [Research note: If you click the ECB link in the article, change the search term "gold receivable" to just plain "gold" and look through there. Controversial data just sort of...you know...disappears when too many people pick up on it...].
The next thing Bart points out is that the annual rate of change on his M3B (which has a 99.99%+ correlation to M3 - before the Fed banksters went and played "hide the sausage" with that statistic a year ago, shows that the broadest measure of inflation is now running 12% annualized.
The reason the government can report low inflation is that they don't look at things like you and me. They make a lot of "hedonic adjustments" so if the price of steak is inconveniently high, they switch to ground sirloin - and maybe even tweak portions to reflect changing consumer habits. But, under it all, price has driven the habit change. Statistically, it's a good bush to hide behind, though.
Elaine asked me this morning "So, why would the government not just report the honest numbers when it comes to inflation?" She was looking at Bart's chart somewhat aghast, and I was contemplating our monthly grocery and power bills.
I explained that the government has a huge incentive to make inflation look low. If they can pull it off (and who's going to argue with government statistics, right?), then they can save piles and piles of money that would otherwise go to increasing pension benefits for groups like retired military, social security recipients, and so forth. I pointed to Bart's chart (and our 9% increase in electricity rates year-on-year) and said "If they can report 4% inflation in the face of 8 to 10% inflation, they can raise your brother's military retirement by $36 a month instead of nearly $100. The money that's saved can then be "invested" in wars.
"You mean on things like the national health insurance stuff in the speech?" Elaine was obviously more awake than me. "Uh...yeah...that's it..." I muttered, stuffing another hunk of toast in my face.
"So, they're going to do the same thing with health care that they did with car insurance - create another "mandatory" requirement, right?" she demanded.
"Oh, sure. That way, even if we don't have any technology breakthroughs, they can force some kind of growth in the economy. Wars only go so far..." I answered between bites.
Permanent War Plans
Elaine wasn't done with the discussion yet. "And you heard it last night; he wants to add 92,000 more troops to military levels over the next five years. So that means the war in Iraq and wherever will still be going stronger than ever in five years and we'll need and even bigger military than we have now?" She had a glint of anger in her eyes, and I couldn't say as I blamed her.
I put on my People's Economist mantle and answered "Well, they're going to make the case that the global situation is getting more tenuous and because of that America will need stronger defenses..."
"Like at the Mexico border?" (We'd both seen the report there was a 700+ roundup of illegals in southern California on Wednesday.)
"Here, look at this headline: Russia and India are working together to build a new stealth fighter. This is exactly what happens with an old system based on unlimited natural resources runs up against the sides of the Petri dish. Rather than let people go along to get along, spend more time fishing and pursuing spiritual development, consciousness raising things, the corporate crowd wants to keep people in the same mold, and manageable, talking on cell phones, buying wrestling pay-per-view, buying HDTV, new cars, and eating fast foods, so they can keep themselves in power. It's really no different than why religious cults of antiquity only shared their secrets with a few chosen "initiates". It's a power thing."
What I was telling her was, in effect, that the Powers That be don't mind keeping the mass of the public down, and wars are dandy economy-controlling population controllers, as long as they can make a buck and ensure their own dominance. "Remember why we do our own gardening? Chemical companies want to spray fluoride on food - and while the claims are dental, the facts are mental - fluoride seems to make people more "suggestible" say some, and it sure inhibits DMT which is the real deal "Stairway to Heaven" for spiritual development. By the way, I've been meaning to order Dr. Rich Strassman's book "DMT: The Spirit Molecule: A Doctor's Revolutionary Research into the Biology of Near-Death and Mystical Experiences."
I was going to have to get back to researching the morning report in a moment. "What I thought was interesting was that in the "State of the Union is strong" part, what was left out was the part that is strong --- the "grip" of the Powers That Be."
State of the Mortgage
If you believe the State of the Union is Strong, consider that the State of the Mortgage is weak - at least in California, which seems to have become synonymous with falling home prices. The LA Times this morning reports that "Default notices jumped 145% in the last three months of 2006, accelerating a trend that began in late 2005 as home sales started to cool."
...is in serious hot water over allegations of rape, sexual assault, and other criminal charges. It's not like this just popped up, but the issue which has been swirling around since before the Lebanon invasion looks like it's headed for an indictment now.
And, speaking of Lebanon, there has been a violent round of protests there as anti-US groups (Hezbollah) are trying to oust the US-backed prime minister (Fuad Saniora). He, in turn is off trying to raise money in Europe for rebuilding after Israel's attacks, which ended badly; to the point where the military replaced one of its key leaders.
Waiting for the Mud
While the web bot project has been pointing to a major flood event this Spring along the Mississippi/Red Rivers, a reader note this morning makes some interesting points:
Oh, and no break in the dam yet.
Check Your Whale
I know, WTF? right? Well, the story is the Navy has gotten a 2-year exemption to use high powered sonar that can damage whale hearing (herring?). (What?) Can't have those dolphins sneaking up on us, you know.
While the Executive Branch of government has been busy legislating through "signing statements" we notice the US Supreme Court has taken more sentencing powers away from judges in a California case.
A toddler and parents being kicked off a plane for crying and making a ruckus is making headlines. While I can see both sides, I also know why this company sells well..
Tuesday, January 24, 2007
Slipping Bucks: Did Banks Beat Wall St?
Bluster and braggadocio will get you only so far in life, and the ones who don't play a long-term strategy based on economic reality seem likely to fail. In the wake of yesterday's decline of the Dow, the word of some Middle East folks (United Arab Emirates, for one recent example, and OPEC as we pointed out yesterday) easing out of treasuries, and the Pfizer layoff of 10,000 non-burger-flipping workers, economic reality may be about to tap dollar-denominated markets on the shoulder. If you're a technical analyst, that'd be the right-shoulder of a massive head & shoulders formation.
If you're awakening to news that gold is up, remember that making money is often nothing more than make a decision between competing investment choices, expecting that this one, or that, will outperform the other over time. Making money is about spreads; the concept of "absolute values" is something for math books and fairy tales.
To illustrate the point, let's consider investment in three possible banks in the year 2002. Investing $2,000 in a US bank would have likely gotten you 2% per year - and by my figuring, you'd have lost purchasing power because inflation has been running higher than interest rates in the US. However, if you had put the same money in a Canadian bank, not only would you have made a higher interest rate, as Canadian banks seem to pay higher rates,
We'll run through specific numbers using the foreign exchange history tools at Oanda.com:
On January 23, 2002, we put US $2,000 in a Canadian Account. At the time we got CA$1.6090 for each US dollar. That's CA$3,218.
Next, we hop into our convenient little time machine, and arrive at the bank yesterday just as the markets were closing. Now, ignoring interest (which as I mentioned tends to be higher in Canada) and we take our $3,218 back to US dollars, we get US$2,745.91. There, see how exchange rates work? That's a 37.3% gain on the exchange rates alone since 2002.
Now if that doesn't get you all whipped up into a frenzy, consider that you could have done better by doing the same thing with a South Korean bank. Your tip off would be a seemingly "routine" financial headline that the "Won Gains Over 40% Against Dollar Since 2002." The average investor is just that - average - because when they read incredibly valuable information like that, they tend to ignore it. "What does it matter to me?" they ask.
Well, nothing, if you follow the herd. On the other hand, US$2,000 on 1/22/2002 would have bought you Won at W1,317.40 to the dollar, so you would start with W2,634,800 in 2002 and if you sold those (again, assuming no interest - that's like a bonus), you could have sold yesterday for $0.0010980, which pencils to $2,893.01. That's a a touch over a 44.6% return in five years.
As an investor, or around here a "capital or purchasing power preservationist", there are always tradeoffs. One way to make that kind of return in the same period would have been to pick just the right stock. Or, you could have chosen to play options. And while there's a bit of additional complexity to putting money in a foreign bank (IRS wants their piece of the action of interest and capital gains there, too, requiring reporting of foreign bank accounts. there's no free lunch), it is nevertheless a little easier to understand that Canada has trees and oil than to develop a "feel" for Black-Scholes option pricing implications of the PDE model:
So to break it down: Korea = hardworking industrious people and a strengthening currency based on trade with the US. Canada= Trees and oil sands. USA= that math mess (and a lot more to it) unless you have inside information and a good lawyer. You following me here?
So, now class, we move on to the day's pop quiz: Please title your answer sheet: "Which direction will the following headlines drive the US Dollar?"
Our Bonus Question for Michigan participants:
Every day, the worlds investment community goes through a sort of "news balancing act." The investosphere absorbs the headlines, policy tweaks, resource reports and such - not even particularly consciously - and makes a herd judgment about the direction of things. And from there flows herd consensus on interest rate expectations, future production guesses, and investment valuations.
While the quants (short for quantitative analysts who thrive on the B-S model of options pricing ( go ahead, take that either way), the People's Economist has slowly figured that spotting hard workers with trade surpluses or trees & oil sands is a lot easier than greeks falling from partial differential equations. And that's one you can take to the bank, as long as that bank is somewhere else..
Closely related: A little chalk talk on inflation and war for subscribers to Peoplenomics.com coming up this weekend.
With our long-standing warning from the www.halfpasthuman.com folks about the potential for a major flood/mud event (Mississippi/Red River) this spring, a number of readers have been sending in clips about the fears that Lake Cumberland's Wolf Creek Dam could fail.
This brings up an interesting linguistic question - one which we face all the time when peering into the future with new science: What I keep looking for is 700,000 people more or less permanently displaced by the accompanying event - and although big, this dam story is likely not "it."
However, as we've talked about before, when you peer into time using words (not a casual undertaking) there's a lot of what can only be called "print-through" so who knows. nevertheless, unless the dam fails, we don't have our Mississippi/Red River flooding - at least so far.
"Your Papers, Please"
New travel regulations into effect today for folks traveling by air to formerly passport-free destinations like Canada, Mexico, and some Caribbean hot spots.
I figure it's anti-terrorism at work. That is, until you have to show a passport to leave. Then it's more like pre-War Germany.
I know that sounds pretty harsh - to put a great place like America in the same hopper with pre-war Germany. The the measured reality is that the US is becoming widely viewed outside of mainstream US-centric media, as a global bully.
A "Big Picture" that most American's don't get is that when you are "fed" political stories, we have the same corporate hands feeding both sides of the political aisle.
So what you think (or are told to think) is that there's some kind of divide between right and left in politics, but the reality is that the corporate folks/people with money feed politics to keep common folks distracted from the vast wealth gaps between the super-rich "haves" and the super poor "have-nots." I'd sketch it out like this.
So, when someone tries to engage you in a political discussion, try stepping back for a minute and look at the other dimensions of things...rotate the discussion into a haves versus "have-nots" and see how it looks.
If you were planning a trip to England to do some of that fine high-end beachcombing we mentioned in yesterday's report - Authorities have stepped in to close the beach after folks got 15 BMW motorcycles and lots of wine. A lawyerly Australian reader sends us his take on the flotsam involved:
So's my check, LOL!
Monday January 22, 2007
US-Russia Tensions Returning
The Berlin Wall came down in November 1989, and what was supposed to be a "peace dividend" has never appeared for us regular folks. And there is a simple reason. Military spending didn't stop. We jumped from a prospect of peace into Desert Storm, and from there, a new arms race in space. The US and Russia are still ideologically miles apart - and getting no closer of late.
This is a story that goes back a ways, and some background about the Strategic Defense Initiative (called "Star Wars" by some) is relevant; " In his 1991 State of the Union Address George H. W. Bush shifted the focus of SDI from defense of North America against large scale strikes to a system focusing on theater missile defense called Global Protection Against Limited Strikes (GPALS). In 1993, the Clinton administration, further shifted the focus to ground-based interceptor missiles and theater scale systems, forming the Ballistic Missile Defense Organization (BMDO) and closing the SDIO. Ballistic missile defense has been revived by the George W. Bush administration as the National Missile Defense and Ground-based Midcourse Defense. "
Now let's jump forward to present day events: Russia is now claiming that the US trying to place a missile defense radar in the Czech Republic would be a "clear threat" to Russia.
You probably don't recall this, but the US unilaterally abrogated the ABM Treaty back in 2001, and coincidentally, that's right when the earliest tests of the web bot project was predicting a huge change in the order of things within 45-90 days of July 1. I pointed out at the time how the US unilaterally scrapping the treaty might eventually lead to a high risk period, which could last until the ABM systems were fully deployed.
So, it should come as no surprise to longtime readers that as the US tries to push its ABM radars closer to Russia, the reaction in the Kremlin is like the lyrics of the old Bing Crosby song "Don't Fence Me In"
With a different belief set than the American media-saturated public, the modern Russian is might be thinking "I want to ride to the ridge where the west commences And gaze at the moon till I lose my senses And I can't look at hovels and I can't stand fences Don't fence me in. "
A fellow named Dmitri Trenin wrote in October of last year about the tensions between once-Soviet Georgia and the "new" Russia, mentioning the almost obvious US containment strategy:
Vlad Putin has been touring Europe lately promising that Russia would be a reliable energy partner, but some in Europe wonder fairly "But, at what price?" And in the Middle East, with a possible show-down with Iran due in mid-March (12-19th is our bet) we notice the Russian media reports of Belarus supporting Iran's nuclear development as being symptomatic of sentiment in the region.
So while the US stock market continues ascending to marvelous new highs (as long as you don't take inflation into account, in which case we're below where we were in 2000), just remember that there's some serious international footwork going on related to defense issues between the US and Russia. Perhaps the he Cold War is only 'chillin.
Not that I'm the only one seeing it: Joe Biden who chairs the Senate Foreign Relations Committee sees much the same thing. So we're into a global arms race - involving the US, Russia, China (thanks to the satellite shooting technology) and growing tensions between India and Pakistan. Too bad about the wasted resources - but great for those defense contractors, huh? Think of it as a Global Cold War.
Flotsam and Jetsam Dept.
If you're into beach combing for a living, quick, hope a jet for the UK in all haste. A cargo ship has run aground on the south coast of England, spilling, among other things, cargo containers and hundreds of barrels of wine. Bring some oil cleaning gear, though. 200-tonnes of oil has leaked to.
Back in my serious sailing days (10-years before the mast) we used to have many HBR's (hot buttered rums) discussing the fine distinction between flotsam and jetsam. One school of thought argued that "flotsam" has to be floating and that jetsam had only to touch the shore in such a manner as to no longer be freely floating. A few more knowledgeable in maritime law tried to convince me, however, that flotsam was anything found below the mean high tide line and lower, while jetsam could be claimed above the high tide mark, as in washed there is a storm.
I mention this, because it may help you sharpen your thinking about the field of presidential hopefuls. Jetsam mostly - as in "washed up" (boom-dash)
But Seriously, Folks...
It's hard to take the Eastern Media Establishment seriously when there is, what appears to me, to be a "bury the patriots" campaign going on. "What in the world is George grumbling about at this hour," you're asking? Ah. I just read the NY Times story about how a "Rush of entries gives '08 Race Early Intensity." Notice something missing? Hint #1: Tom Tancredo. Hint #2: Ron Paul. Not a mention that I caught, although admittedly, the coffee is still soaking in.
I'm not generally a media critic, but when a story mentions names of current and past runners & losers like Clinton, Richardson, McCain, Romney, Edwards, Brownback, Obama, Clark, Kerry, Bush, Gephardt, Bayh, and Warner, I'm maybe not surprised, just a little disappointed that Paul and Tancredo weren't at least mentioned..
Why not at least mention that Ron Paul is running for president, too? And so is that Colorado patriot Tom Tancredo.
It appears to me that border defending, Constitution supporting, hard money advocates aren't getting the same ink as folks like ex-presidential media royalty, a trial lawyer, and so on. Maybe I've misread something and don't understand the issues facing America. To my simplistic way of thinking, border defending, constitution supporting, and sound money ought be at the top of the list. I guess that's why I publish my own financial news and op-ed site, huh?
Experts say this is the worst day of the whole year - a sort of cosmic bummer when all the bills come in from the holidays and more.
But not to fret - In the event you're bummed, let me share this short bit of poetry/advice from Poet of the Yukon, Robert Service - long one of my favorites - because it can really help:
Source: Gutenberg eText of Service's "Rhymes of a Rolling Stone" And, if you don't know about all the fine works at the Project Gutenberg site, and you haven't flashed them into your head with a Vortex Reader from the www.HalfPastHuman.com folks (see the bottom of the page), you're missing a fine opportunity for self improvement.
Markets: Gold soft, Oil firm
Oil is up again this morning because of the cold weather making the rounds. We also notice that gold was down a bit due to the dollar being jammed up in the pre-open. Wake me when we close. The subtle story is OPEC dumping more Treasuries, which is why the dollar is being jammed up. That's the real story, methinks.
Ramblings from the Editor's Desk
A number of things are kicking around my desk today - most having to do with what I don when I am not munching on cynic pills and writing about the economy. For example: finding the right SEO provider for a consulting client, for example. (Suggestions welcome). Trying to find the perfect Google Adwords algorithm for integrating a general adwords search term list with a list of words that actual produce client sales and structuring the management of the paid searches (several thousand general search terms and several hundred proven revenue producing terms) in a convenient way (again, suggestions welcome, especially if you have large Adwords campaign experience and results).
Then there are the farm chores, many of them delayed from this weekend due to an outburst of gout in my right knee triggered by any one of the following: banging right knee while doing construction in the shop, twisting knee when falling, or straining knee while pushing some of our timber-cutting leftovers into a small ravine on the property in freezing rain late last week. Nothing that plenty of rest, celery seed tea, eating healthy (and no evening branch water) and no red meat, or peas, or heavy sauces/gravies I'm fond of, won't cure. So things like calling Harbor Freight and saying "Where's my second package that FedEx says you haven't given them yet gone?"
Then there are the million and one ideas on ways to improve both UrbanSurvival and Peoplenomics. One way, I suppose, is to do a little more radio time with Steve Quayle, so I will be on his show tonight. 6 PM Texas Time (7 PM Eastern, if you're not familiar with time here in the petrocenter of the Universe).
Another task up this week is sorting through the great entries (34 of them) in our "What's the best way to spend $10,000 to improve personal "survivability" for whatever the Universe throws at us next. Everything from bug-out plans, to ratios of defenders to attackers if you make a stand somewhere - all very much worthwhile reading.
Out at www.halfpasthuman.com, both Cliff and Igor have been stewing, coding, and grumbling out both a massive email attack (Cliff had more than 55-thousand emails slammed into his machine in a 12-hour period this weekend) as well as a Denial of Service (DOS) attack on the bot data collecting server before it was shut off per the plan. That attack came out of Germany (for the most part) but we figure that was a bounce from who-knows-where, although it does put in question whether there will be a Part 7 to the current ALTA 907 run - time will tell if there's enough data to get meaningful data. But, like the movie fellow (now gubernator) sez: "We'll be back."
Last, but certainly not least, I will get through a pile of mail including subscriber renewals that were sitting in the inbox - shouldn't have any impact, though, because I haven't turned anyone off - and won't for a week or two. Once we get to February, though, I may move the whole library of past UrbanSurvival columns (hundreds) over to the subscriber-only side. Maybe leave a month or so on the free side. We'll see. Comments welcome.
Write when you get rich,
George Ure, The People's Economist
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