Almost without a doubt, the biggest economic story is the one swirling about
how pre-holiday shopping went Friday and how it will go for the balance of
the weekend. This being a consumer-driven economy, what happens at the
cash registers this weekend will set the mood for all kinds of folks, but in
particular, it will answer the question: "Are American Consumers really
tightening the belt in reaction to higher energy prices, under-reported
inflation, and the housing bust?"
It's too early to tell: The real tallies won't come in until the
Monday-Tuesday timeframe, so between not and then, we'll be looking at
stories about how "Shoppers
take advantage of Black Friday deals" as being indicative that something
if going on, but just what it means won't be clear until the nation's
biggest retailers go to shareholder confessionals next week and report
either sales up compared with last year, or down, as the case may be.
This will present a 'newbie' to sorting out weasel-worded financial reports
with a golden opportunity to cut through corporate PRBS. One thing to
look for will be retailers who begin their press releases with something
like "Sales of xxx (- where xxx means one department within a store, or
other) were up yyy percent this year." What the under-performers will
be trying to do is give the impression that everything is hunky-dory.
You job, as an UrbanSurvivor, is to seek out disclosure phrases like
"overall, sales were up/down z percent" - those being the real nu7mbers
you're after as an investor. Who cares if electronics go up 20% if
overall sales are down 10%, right?
Moreover, just as "Weather
the most important driver for beer consumption in Brazil", so too,
weather has a lot to do with holiday shopping in the USA. One day of
retail sales figures can be greatly moved just by the weather. Again,
the thing to zoom out on is the overall picture.
Don't forget Truth versus Inflation: an "increase in sales" doesn't really
mean much, until it is compared to (or subtracted from) the prevailing rate
of inflation. In other words, from an economic stimulus standpoint, if
inflation has been running 5% and sales are reported in some PRBS as "Sales
Overall Up 5% compared with last year..." then a reasonable person (or even
me) would conclude that there really hasn't been any increase to spur
general prosperity. It's just inflation working its way through the
More definitively, we will get new Consumer Debt figures from the Fed in a
week or two, which are much more meaningful. You may recall that the
November report on Consumer Debt (which they insist for bankstery reasons on
Consumer 'Credit') was up 1.8% on an annualized basis, which when you're
in a 2-6% inflation setting is actually the best sign you could ask for that
the economy is already in a recession, although classical economystics would
It honestly boils down to this: Be very very skeptical of the earliest
reports that sales are up (or down) so much this year. Remember
weather is key, crank in your best estimate of inflation, and go from there.
Shocking Electric Bill
I like to use my electric bill as a good local benchmark for what inflation
(the real stuff, not the corpgov / PRBS reported stuff). My neighbor
and I were both amused to receive word that our local electric co-op was
raising rates 5.9%. I don't like the number a bit, although it's
not worth going to a 'public meeting' on such because, as any darned fool
knows, such increases are already a 'done deal' and public meetings are just
a chance for management to put on the PRBS 'we care' face while hiding the
fact that 'inflation is really a lot higher than we're letting on" reality
Bank Run Tip
A former senior commercial loan type in the banking business sends along
this "confirmation" of how things are going in the US banking world:
"Just a note based on what I read. I just left my banking position
(major money center banks as senior commercial loan officer) and the
comment from one of your readers holds true. There is a procedure in
place now to circumvent any type of 'run' on funds. Specific plans for
limiting daily cash draws and total withdrawals within a specific time
period. Read the small print on bank literature, their ability to do
this is there.
Secondly, I was in commercial lending and there is no new policy
position to limit corporate borrowing. However the credit folks are
becoming the stone wall leaving the officers to deal with the customers
as to why they don't quality when their financial situation is as good
or better than during previous credit actions. My counterparts at other
banks are experiencing like problems. Drying up the credit to
businesses, unofficially. Not a good sign. Thanks for your good work."
Bond Trading Question
suspends mortgage bond trading between banks" we have to wonder if that
trading will resume on Monday, November 26 as reported, or if it is toast
Australia, the conservative government which was closely tied
policy-wise to the neocons in DC, have been handed their walking
papers by voters. This means that Australia will likely pull its
troops out of Iraq at some point, and will maybe even join the rest of the
planet and sign the Kyoto Accords. Which leaves...oh, don't get me
started. It's a weekend, after all...
On the other hand: These results are based largely on exit polls and
these being conservatives, we have to wonder about voting machines, eh?
Life in Africa's Weimar
If you're into economics, and haven't at least read a short summary of how
utterly bad an economy can go, then
you owe yourself a
quick read here. The 1920's experience in Germany was not only a
marvelous example of inflation, but how economics can lead to a
Then, as you smugly think "Oh, that can't happen again..." go read up on
recent economic events in Zimbabwe were there's $58-tillon in cash currently
The gross domestic product of the country, figures the CIA, is about $25.6
billion (US) dollars.
You're welcome to figure out math, but the really short answer is that when
a government prints up $58 trillion against an economy producing $25.6
billion in goods, you've got runaway inflation.
The thing to watch, especially if you have diversified some of your
retirement to so-called global funds, is inflation in other countries.
Wholesale inflation in India is
now running 3.01% by local reports. And the
latest headline number out of China is 4.5% for the year.
Say, did I mention my electric power bill is going up
Another data point in my cognitive dissonant world comes from the pages of
the Atlanta Journal Constitution which headlines: "Food
prices likely to keep climbing". They (properly) note that food price
inflation is about 4.4% year-on-year rather than the corpgov 2% core rate,
which they were too polite to call a political wet dream.
Oil sellers, not fooled by any of this have continued to hold prices near
$100, and the price of
gold moved smartly back over $800 at week's end. Truth detectors.
Texas Sky Spies
Some of that UAV technology that's been used by the military In
Iraq/Afghanistan/ and we hear Iran, is coming home to roost in places like
Houston. Under the guise of 'homeland security' no doubt.
But, now here's a question: Will the FAA allow these little critters
to fly at altitudes lower than legally permitted by 'human aboard' craft?
AND, if one is flying low over my ranch and I shoot it down (mistaking it
for a vulture going after my chickens) would that make me a "t" word person?
----snip and save section ----
Food Around the Word
Thanks to a couple of sharp-eyed readers, I've tracked down two places where
you can see the post "What
People Eat Around the World". Look for the relationship between
packaged and processed foods and costs...
Also at Stan (& Holly) Deyo's site now.
Making Ends Meet
Another great reader idea:
George, Your readers might be interested in this free website that has
some great financial planning information. The main website is
www.crown.org. It is a
Christian financial (non-denominational) website to help people plan
their finances and get out of debt. Although the website is based on
Biblical principles, the information applies to anyone.
The premise of the website is how to live comfortably within your means,
and how to reduce and eliminate your debt so you will be in a position
to be financially stable and be able to increase your giving. There are
budgets, calculators, and options to talk to online or in-person
financial coaches (at no charge). One of the best features of this
website is their "money map". It can also be accessed at
This gives detailed explanations to the seven steps to financial
freedom. Every kid in high school should be exposed to this information.
You would also be surprised at how many adults call in to their daily
radio show in financial straits who have followed this money map and
eventually gotten back on stable ground.
step one: emergency savings of $1000
step two: pay off credit cards, increase savings to 1 month of living
step three: pay off all consumer debt, increase savings to 3 months of
step four: begin to save for major purchases (home, car, retirement,
step five: buy affordable home and begin investing (prepay mortgage)
step six: pay off mortgage
step seven: retirement is funded, begin giving more generously
As you can imagine, this group counseled strongly against taking out
adjustable, zero-down mortgages during the recent housing boom. Living
beneath your means may come easy to you and I because we were raised
that way, but not everyone has had that advantage.
---- end snip & save -----
Around the Ranch
A reader was kind enough to send in an economist joke making the rounds:
"A mathematician, an accountant and an economist apply for the same job.
The interviewer calls in the mathematician and asks, "What do two plus
two equal?" The mathematician replies "Four." The interviewer asks
"Four, exactly?" The mathematician looks at the interviewer
incredulously and says "Yes, four, exactly." Then the interviewer calls
in the accountant and asks him the same question. The accountant says,
"On average, four - give or take 10 percent, but on average, four." Then
the interviewer calls in the economist and poses the same question:
"What do two plus two equal?" The economist gets up, locks the door,
closes the shade, sits down next to the interviewer and says, "What
number did you have in mind?"
That's the kind of thing that goes through my head when I see previously
noisy data sets from government agencies suddenly (since the first of this
year) lose their "noise." Seriously makes me wonder has statistical
variation become extinct due to global warming, or something. Couldn't
be political now, could it?
The Switch to Digital Money
Money, as a means of storing value, has evolved through three major
stages. Beginning with the ‘tangible assets” phase, consisting of land,
crops, livestock, fruits of labor (housing), and natural resources
(level 1), and progressing through the precious/monetary metals stage
(level 2), the world is presently in what may be the final phase of
several paper currencies (level 3). Chief among these is the U.S. (level
3) dollar, which has seen purchasing power fall from an absolute dollar
since the 1913 implementation of the Federal Reserve to what is now less
than 5cents of purchasing power (e.g. PPP) through expansion of the
monetary base out of relation to value produced. In light of this, an
alternative fourth generation of value storage is proposed: Digital
Currency. Highlighted are the anticrime, tax avoidance, twotiered
currency aspects, banker/corporate control of governance (PAC’s, et al),
and privacy issues related to a true National Digital Currency (NDC) as
an alternative to the conventional fiat (level 3) currencies. A method
of implementation is inferred along with one big social impact.
More for Subscribers
Pass It On
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click here to send an email to someone you know telling them what a
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Can you trust Politicians?
To get your "No Incumbents in 2008" click here. They're just $5.
And no, that would not keep Ron Paul from running for the White House he is
not an incumbent for that office having never held that job before, you see.
Guide to Living Cheaply
Order our handy ebook "How to Live on $10,000 a year or less and learn
to live like a Third World person now. It's coming anyway, with big job
layoffs this summer and by ordering now, you can beat the rush...You may have
more time to read this fall if the economy falls apart as I expect...
report is here.
Friday November 23, 2007
Same Trends, Acceleration
So here we are at the front end of the emotional release period, largely
financial in nature, which should carry us into the final week of January.
Doesn't look particularly frightening at the moment, just a continuation of
trends spotted earlier:
Headlines seem likely to drive things now with the headlines pointing toward
a higher open. Sadly, a higher open doesn't necessarily mean a
higher close. We've seen a number of higher opens reversed lately.
In my tracks of 1929 and 1987, a perfect close replaying 1987 would be a
close at 12,914.74, while a 1929 parallel would argue for 12,518.4.
A close significantly over 13,050 by next Tuesday would signify the tracking
has been over-powered by the Fed and the PPT, but if we test 12,000 this
week, the 1929 track would suggest testing 8,600 the first week of December.
Feel better now?
Which "Big Bank"?
A Financial Times story, "Trading
in derivatives slows to a trickle" contains this one juicy nuggtest to
be following closely, given our report last week on how some of the Big
Banks in the US are putting limits on the amounts you can wire transfer out
of your account daily or monthly:
"Although Thursday is typically slow because of the US Thanksgiving
holiday, bankers said the week had been unusually light because of the
growing fears that a big bank could go under as a result of losses in
the US subprime mortgage and structured finance markets. "
OK, so which Big Bank? Watching for signs...
Look at your Naval...
cruise ship has been abandoned off the Antarctic - sounds like it may
have hit something.
The USS Kitty Hawk was
barred from making port (& liberties) in Hong Kong over T-Day.
Middle East Talks
foreign ministers met in Egypt today in a tune-up for Middle East talks in
Annapolis next week. Holding your breathe for a break-through? Not
Your Electronic Leash
A very good story
in the Washington Post about how the government is getting cell phone
tracking information without specific probable cause that a crime is being
I'm reminded that my late father warned me (back when I started carrying a
largish Motorola portable VHF radio as a newscaster in the 1970's)... "Why
do you want to carry an electronic dog leash?" I don't carry a cell
phone today for this (and health) reasons.
A study by the Heritage Foundation claims democrats are the party of the
rich. But what's the Heritage Foundation? Says
Wikipedia in part it's one of "...the
most prominent conservative think tanks..."
In my simple world, conservatives calling liberals the party of the rich
is not exactly surprising. Seems to me there's only one party in
America anymore, and until corporations are effectively banned from buying
favors from both parties, and only humans allowed to contribute, this kind
of story feels to me more designed to prop up the failing illusion than
delve into any deep-seated truth. Next
Surfing the Inbox
Great content in the inbox this morning. here's a good starter: a
street-level view of the quickly forgotten people suffering in the aftermath
of the SoCal fires. (Remember those? MainStreamMedia doesn't
"Hey Mr. Ure,
So I returned home from school for the
holiday not realizing how hard it would be to wake up and look out the
window and see burned out houses. My folk's house is right in the middle
of one of the hardest hit parts of San Diego with a large number of the
houses on the street gone. I can't tell if the fires demonstrated more
the strength and courage of the community or the ugly passions hiding
deep inside white suburbanites. I came home to violent hate messages
against immigrants and gays sprayed on the walls of my subdivision, cops
stand watch for looters on every other street corner and newspaper
editorial pages continue day after day publishing confused finger
pointing. Amidst all the debate not one voice calls out the obvious
underlying problems behind the whole crisis. If the next few years of
suburban life were a film coming out in 2008, what I've seen today would
be the official movie poster.
Here's by far the sickest part of the
situation, though. A week before I got here, my mother caught some ad
agency trying to do a photo shoot at the site of one of the destroyed
homes (whose owners had no idea this was happening). She was taking my
brother home from school and saw the models--all dressed up in clearly
expensive apparel--leaning against the one wall still standing on the
plot as photographers shot away as they do. After calling the cops my
mother came out to argue with the photographers as another truck filled
with more photography equipment pulled up. Unfortunately they left
before the cops could come arrest them. While thanking my mother later
that day for scaring them away, the women of the burned house mentioned
that if one of the models hurt herself while stumbling through the
rubble, the owners of the plot would be held liable.
I hate to admit it but a part of me wished
my folk's house had burned down. Then they might have realized it was
time to leave this city with a human population capacity of probably
less than a few thousand that shares a border with one of the most
unstable countries in the hemisphere. This sickest part about it is that
many people who lost everything are staying and rebuilding on the same
exact plots. They will be royally f**ked over. But you can't exactly
warn them personally, can you. Carolyn Baker is right, people will not
'get it' until they are literally starving and by then it WILL be too
Not our job to 'save everyone' - just trying to raise consciousness a bit
that there's more going on that makes headlines. Which sort of gets to
this next one:
"Hope you had a Happy Thanksgiving! As
dismal as the future may seem, we still sure have a lot to be thankful
for. I hope you'll agree.
I skimmed your article about the end of Fiat
money. How fitting and prophetic as the very next day the Fed raided the
Liberty Dollar headquarters and confiscated over 2 tons of gold and
I've also noticed that recently all
merchants are expected to comply to greater so called "security
standards" if they are wanting to conduct credit card transactions with
their customers. While this might appear to be a positive move on the
outside, the implications of it scare me a bit. Whenever you have a
proactive action towards greater security, there is always an opposite
and equal loss of privacy and freedom on the other end. Maybe I am wrong
here or overly suspicious, but it does seem to me like the move toward
the latest PCI compliance standards here is not necessary as much to
protect consumers as it is to monitor the transactions of the merchants.
Although the double benefit here for the powers that be, may also be
that it will motivate consumers to shift more towards the greater use of
credit in conducting transactions because of a sense (however false it
may be) of more security.
Keep up the great work! You really need to
add the Digg button to your articles on urbansurvival.com"
about a Digg button, but the problem I have is that Digg buttons work best
(or only?) on pages that are dynamically renamed/ renumbered every
day. I set UrbanSurvival up so that you could always bookmark
www.urbansurvival.com/week.htm and get the most current content and no
writing a redirect page, or things like that.
save section ---
This from a
reader in Canada is interesting
New subscriber from Canada here. Not to
sound corny, but thanks for your column. After reading "Twilight in the
desert", "The long emergency" and "The creature form Jeckyll Island", a
few too many pieces started to click together in my mind to keep on
blissfully ignoring what's coming ahead. (Had a nice little meltdown
actually *g*) Sadly though, it seems that news in Canada are part of the
same LameStream as the US and Canadian information on this sort of thing
seems to be both rare and marginalized. After a few years of admin work
in the financial "industry", I know that any major downfall of US
markets is going to hit us hard here. (Like they say here, when the US
sneezes, Canada gets a cold.) So thanks for the column and all those
nifty links that allow me to form an opinion from actual facts and keep
in touch with the "real" reality instead of the illusion of it being
churned out by the "News".
Anyhoo, the reason I'm writing today is to
share some of the "coping" things I have found in my quest for positive
action in regards to the above and that may interest some of your
Food: one website I like (in spite of a
slightly religious slant) is
http://hillbillyhousewife.com/ This site list nutritionally
balanced menus for a family of four, one on 70$ a week and an
"emergency" plan on 45$ a week. Moreover, the site has shopping lists,
recipes, shopping tips and nifty ideas for home made version of pricier
food items. There's even a breakdown of what kitchen work needs to be
done each day, which I think will help busy families who never gave any
thoughts to baking their own bread before (That's when the religious
slant comes out, in things like "punch the dough when you get back from
church", etc... It is far from offensive though. I didn't mind it even
though I'm proudly atheist. *g*)
Looking for low cost lunches while slaving
away at your day job a little longer?
http://www.survival-center.com/foodfaq/ff1-toc.htm Lots of
good info here.
http://makingbysaving.com/phpBB/index.php This site has
recipes for homemade household cleaners and tips for saving money on
daily use items.
Scared of things you don't understand?
Looking for free education?:
http://peakoilblues.com/ Because sanity is important too! *g*
(I guess I should include
https://mozy.com/home under the sanity category too, one never
has too much backup!)
And my all time favorite:
http://www.backwoodshome.com/article_index.html They have
articles on everything from voltaic energy set ups and how to butcher a
chicken to preserving apples through the winter and re-using sweater to
I hope this will help someone out there.
Thanks again and keep up the good work!"
Along the same
lines (or similar) to Backwoods is
Countryside and Small Stock Journal.
The time monks
also sent in a link, but it wasn't working this morning - basically it was a
picture of a family of four in each of many countries showing what it cost
to feed them. If they find the link (or the source) we'll get it up
here because it was really interesting that the price of eating seemed to be
directly proportioned to the number of processed/packaged foods in the
---end snip and
save section ---
Thursday November 22, 2007
Most of America uses worry time today to ponder such things as "I wonder if
the dressing will be moist enough?" and "Should I give it another
20-minutes, just to be sure?" or my personal worries "Is Lowes open this
morning so I can pick up a dozen 2 by 4's and another 10-pounds of
construction screws I need?"
The most addicted to the 'paper chase' however, will spend today looking at
charts and graphs and
further 211 point slide in the Dow.
Asian markets, already hard hit this week, managed a sort of 'hold the line'
while Japan's Nikkei was up about 51 points.
Europe, which doesn't celebrate Thanksgiving ( and is polite enough not to
remind anyone that the US was settled by could be argued to be religious
extremists...) was having a small bit of an upside bounce when I last
checked, but click
here for the latest.
I concluded, about halfway through the first cup of coffee that worry today
falls into two categories on holidays: Good worries and bad. The good
are things like "I wonder if the cherry pie should have another 2-minutes?"
while the bad are "Will there be (false flag) terror to pump up political
equity and divert attention from the dollar's slide?"
In keeping with the linguistics boys, we'll try to stay focused on the pie;
things actionable are what count.
I try to remember to send a few bucks here and there throughout the year to
the local food bank. Reason? People need to eat all year, and
with foreclosures going up, and employment officially unchanged, the demand
sure seems to be growing.
And the story is much the same all over the country.
Where America's values get all sideways (and sorry to whine about this) is
where we have families that feel some kind of obligation to buy 12-year olds
(and under) cell phones and don't send money to their local food bank every
month. I guess you can tell who's susceptible to 'fear marketing' and
who's thinking like independent humans, huh?
Besides why not have a national age limit on cell phones, just like we do
for driving? After all, a kid with a cell phone can get into more
trouble than with a car in many regards...
My eldest daughter Denise up in Seattle turns 30 today. I don't know who
turning 30 is rougher on: the child or parent...
Denise called Wednesday, not waiting for Black Friday, to tell Dad
she's all amped about a new electric car
she wants to buy, an Aptera. "Don't see a total price, just the $500
down form," advised Dad the Grinch. "And, did you see where it says
"..only available to those who reside in California"? "I don't
care, I want one - I'll just get a PO Box in California...."
Whatever. And a long enough extension cord to get it from Northern
California to Seattle?
A reformed 911 pilot, Dad's pick of the
electrics is still the Tesla Roadster.
0-60 in under four seconds is my kind of ride...or lacking a 911 or a Tesla,
I'm stuck with my Kubota.
It's OK, as I don't think Porsche or Tesla offers a loader bucket or two
speed PTO option...
Nevertheless, I'll keep dropping hints that a nice used 911 turbo
(anthracite, please) would make a fine "thankful reader" present for me -
although I expect my hints will yield the same results as Denise is getting
from asking Dad to consider a new Aptera for her...
The last challenge
to the re-election of Pakistan's president Musharraf has been dismissed. Quick!
Look surprised. Who appointed the court?
Restrictions on Travel
Not only a rail strike in
France, but now sabotage to boot.
Alright, here's today's example of headlines that conflict and cause
Sunnis killed south of Baghdad"
"US reports 'phenomenal' drop in Iraq violence"
Some 'predictive' sounding headlines:
year, shop till prices drop"
forecast Index sees Weakness Into 2008"
sales, prices, decline nationwide"
FireFox 3.0 has been rolled out - for those who live on the "bleeding
edge" of technology. Meantime, if you're on FireFox 126.96.36.199, there
should be a security patch out (188.8.131.52) next week to plug a
Notes on the Modern
I suppose we could peg this as something from our "Let's Regulate
Everything" file, but I think it goes deeper. The headline is
"Lawmakers Attack Video Game Rating, Seek Review" and it goes on with
the sub headline: "The lawmakers cite a psychologist who claims Nintendo's
Wii and Manhunt 2 combine to teach players the behavioral sequence of
Most folks don't spend much time thinking about how warfare has been
institutionalized into culture. However, when you think about it, most
of the sports world - and government - is based on:
Hitting someone (Boxing)
Hit something with a stick (Golf)
Hit something with a club (Baseball)
Keep away and don't share (Basketball)
Keep away and don't share something cold (Hockey)
Push people and injure them (Football)
Steal from the less fortunate (Taxes)
Steal people's savings (Inflation)
Against this background, I'm appalled that the do-gooder lawmakers would
seek to attack what's a very small corner of the warrior culture in America.
Video games to kill? Shoot, partner, that's the stuff that leads to
gang membership, guns going to school, and ultimately, to plenty of trigger
pullers for national wars for oil...
Besides, it would put a crimp in my video game script for something I call "Politiks"
which involves an male avatar running for high office, accompanied by a wife
and family and how the avatar makes just the right deals with the right
shady people and drug dealers, and then has those who get in the way quietly
'offed' to make sure he survives.
Yeah, don't be regulating violence in video games, they're just a reflection
(not even to the extreme) of the warrior culture we think so little about.
But somewhere in here is a million dollar idea: How about a game
called "Trauma Doctor" where patients are shown on a screen in various
bloodied conditions from accidents and what have you, and your job is to
save them by applying the right lifesaving techniques in the right order?
Or, a management game with a more meaningful outcome than just being an xxx
tycoon: Food Bank Director where the goal is to feed as many people as
possible, for example.
Personally, I hope there's a market for 'positive' games, but as a
half-step, why not take an existing game, and I'll use
"Deer Hunter" as an example here, and expand it into a more socially
conscious game? The task could be set up as "You're a very special
kind of deer hunter: You job is to cull a herd of deer of those infected
with Chronic Wasting Disease..."
The basis of this kind of game is far from fictional. Come to
think of it, I guess
Wednesday November 22, 2007
Release Period Beginning:
Dump the Buck
We might get a short term rally, but the dollar is in serious trouble
figures legendary commodities trade Jim Rogers.
video - he tells it like it is! On Ben Bernanke, for example:
"The man doesn't even understand economics and that's terrifying..."
Wow - sounds like our outlook on things...death of the dollar goes
A day or so early, but this is what a release period is all about: "release"
and quite specifically, the release of a new book by
White House Press Secretary Scott McClellan who blames George Bush for the
Valerie Plame leak deceit.
Headlines are already asking
will McClellan be John Dean to Bush's Richard Nixon? This is one
of those stories that was around early yesterday and in corpmedia it was
sort of buried for a few hours, but this one is proving too hot to hide.
Blaming the president and his (then) PR man for deceit is not something
to be taken lightly.
But, that's not the only sign of a release period getting underway.
Gnaw on this chart a bit:
With the dollar up a tad in the early trading and global markets down, a
drop of the Dow by 100 points or so today would not come as a surprise.
My friend Robin Landry is watching two 'lines in the sand' for the current
decline: 12,815 and 12,517.14 (the August low). Take these out and the
big elevator drop which I'm expecting by late next week pulls into view.
If the 1929 track were to play out perfectly, we would close today at
12,922, skip tomorrow, and then Friday we would have a bounce of the 12,517
area. That rally would take us to 12,731, and then we'd be in
'thousand point down day' risk during the first week of December.
But, naturally, history won't replay so conveniently so don't go trading
on this - just tuck it away as something to ponder. Nothing says we
can't test that 12,517 area today. Or never.
Seems just obvious as hell to me that we are entering into a high risk
period and given that linguistically this release period will be largely
financial in its orientation, it's something to keep a sharp eye on.
War Money War
the Decider and the Congress continue debating a military spending bill.
The Bush camp doing the layoff fear mongering and the dems trying to limit
the never-ending flow of funds into the Bush Wars.
And the Point is...?
You know a country is at a civil war/rebellion flash point
when lawyers take to the streets - as they are doing lately in
Pakistan. But, with a US backed Musharraf,
and US control of Pakistan's nukes, and a Musharraf stuffed supreme
court in the country, I'm not sure what the point is?
I mean other than revealing that some US media sat on the
story about how $100 million of our tax money has been spent on a secret
program to keep US control of Pakistan's nukes - which now that it's
common knowledge, will no doubt further erode the image of the Musharraf
government which is being seen more and more as a US proxy in the region.
And the 40 people killed overnight by Pakistan troops: "Rebels" or honest
political opposition to Musharraf? Seems an important question that
won't (or can't) be asked...
The UN says that yes,
it incorrectly over estimated the number of HIV/AIDS cases in the world, but
says it was not intentional. Wonder if similar confessionals
will come about global warming somewhere down the road?
2nd Amendment Case
US Supreme Court has decided to hear a case where an appeals court sturck
down a 31-year old band on handguns in Washington DC.
Our take: Judges who think the second amendment is archaic demonstrate an
inability to read what's clearly spelled out in the Constitution and should
be removed from office and replaced with folks who can read plain English.
"Shall not be infringed" is pretty damn clear. And as for the militia
aspect: If a home invasion is attempted, every family member is instantly a
member of the family militia...
With school shootings already happenings on college campuses (and not just
in the USA), a
more than 8,000 college students nationally want to be able to carry
firearms to school.
One of my brokerage accounts sent me this handy dandy list of what's open
and when today through Friday: Worth sharing and complied, says the
email, from usually reliable sources but no responsibility for
Wednesday, November 21
CBOT Floor: 12:00 close: Financial,
Agricultural contracts 12:30 close: Mini-sized Ags Regular close: Equity
and metals contracts
eCBOT: 12:00 close: Agricultural contracts
12:30 close: Mini-sized Ags 1:00 close: Financial contracts Regular
close: Equity, metals, and DOW-AIG contracts Overnight eCBOT closed
CME Floor: 12:00 close: Foreign exchange,
Commodity and interest rate contracts 12:02 close: Commodity options
Regular close: Equity, GSCI, weather, and housing contracts
GLOBEX: Regular close: Foreign exchange,
Interest rate, Equity, NYMEX/COMEX, commodity, weather, and housing
Nymex/Comex Floor: Regular close
CME Globex and Clearport: Regular close
NYBOT/ICE Regular close
OneChicago Regular close
NYSE Regular close Thursday, November 22
CBOT Floor: Closed
eCBOT: Closed: Daytime eCBOT Closed Regular
evening opening: Financial, Equity, agricultural, metals, and DOW-AIG
CME Floor: Closed
GLOBEX: Regular evening opening
Nymex/Comex Floor: Closed
CME Globex and Clearport: Regular close
NYSE Closed Friday November 23
CBOT Floor: 12:00 close: Agricultural,
Financial contracts 12:15 close: Equity Contracts 12:30 close:
Mini-sized Ag contracts Regular close: Metals and DOW-AIG contracts
eCBOT: 12:00 close: Agricultural contracts
12:30 close: Mini-sized Ags and Equity contracts 1:00 close: Financial
contracts Regular close: Metals and DOW-AIG contracts
CME Floor: Closed: Dairy and Dairy Spot
calls 12:00 close: Foreign exchange, Interest rate, Commodity, GSCI,
weather, and housing contracts 12:02 close: Commodity Options 12:15
close: Equity Contracts
GLOBEX: 12:00 close: Commodity, GSCI,
weather contracts 12:15 close: Foreign exchange, Interest rate, Equity
and Housing contracts
NYMEX/COMEX Floor: Regular close
CME Globex and Clearport: Regular close
NYBOT/ICE Regular close
OneChicago Regular close
NYSE Floor: 1:00 close *All times listed in
Central Daylight Time
Our thanks to JB Slear at
www.fortwealth.com and his clearing firm PFG for the heads up - a sort
of complicated path, huh?
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Cheap Computing, Another Food
A reader in Tucson was wondering:
"Hi Mr. Ure -- Thank you for your time, and
your intervention has made a difference (also after I upgraded from
Acrobat Reader 4.0!). I'm hoping your book incorporates the purchase of
a new compute & software in the $10K formula!! As I dream on, I remain
fully interested in every word behind your experience.
I've always pretty much lived below my
means, and look for inspiration to transition from fully employed in the
I don't remember if there's a section in my ebook "How to live on $10,000 a
year, oir less..." on low end computing, but I wrote back...
"Well, the super-cheap computer IS possible.
I will have to see if I have that in the
ebook (good idea) but here’s how you would do it:
1. Pretty much any old computer (even a
Pentium III would work fine at 100 mhz or so from what I read… these can
be found for $50-100. Here’s a Pentium 4 ad out of your local
Old W-98 machines still run and no one is
writing viruses for them...LOL
2. Or, here’s an AMD for $125
http://tucson.craigslist.org/sys/485236293.html but you might
want to up the memory for another $40 or so.
3. Or, really holding the budget, try this
You can pic up a 17” CRT monitor used
for $40-50 – just if you go this route make sure you have a modem…
4. Load the old computer with a copy of
ubuntu linux (www.ubuntu.com) (free download)
5. A copy of Open Office (www.openoffice.org)
6. FireFox for Linux (free)
7. A dial up internet connection: $10/month
(120/year) www.netzero.com/ www.juno.com and others)
I also can't begin to tell you how many good deals are out there on Craig's
List ( www.craigslist.org ) so if
you need almost anything you can find it there. True, all used,
but when I'm looking for construction materials for example, no point is
paying new prices if I can find something used for a low price. Out
here in the dingle berries of East Texas, many more deals on Craig's list
than the local paper.
Another Food Tip
A reader contributes this:
I'm glad to see that people are sending
great information on coping with hard times that are sure to come via
the Fedster's games being exposed. I wanted to share the name of an
organization that is helping many families survive and supplement their
groceries and that is Angel Food Ministries,
For $25 a unit, consisting of various
staples (rice and beans), desserts, boxed goods and meats, you'll get
what would feed a family of four one week. The average retail price of
the food would run $65-75 dollars. Much of it is name brand items that
can be found in your grocery store, but at a fraction of the cost. If
you buy one unit, you can purchase additional "specials" such as Ribeye
steaks, fruits, chicken tenders, microwave meals and so on. The menus
vary month to month, so that you have a variety in your diet.
What's really great about Angel Food
Ministries is that you don't have to be low-income or on Food Stamps.
Any individual, rich, poor and in-between can benefit from this and it's
done in such a manner that one can keep their dignity intact. With many
host sites around the country, people can usually find one nearby.
There's a couple of host sites that are close to you, in case you want
to try it out. "
"Deadbeats" Stay Here
One last coping item from a reader - should you ever wish to be able to exit
America at some point down the road, here's one to plan for:
"Re: restrictions on travel and your
"Defense of the Homeland."
The United States government restricts
foreign travel for so-called "dead beat" parents who have not paid up on
their court ordered child support. Section 51.70 (a) (8) of Title 22 of
the Code of Federal Regulations outlines this mandate. This section
states that if you are certified to U.S. State Department Passport
Services by the U.S. Department of Health and Human Services (HHS) to be
in arrears of child support payments in excess of US$2,500, you are
ineligible to receive a U.S. passport. If this applies to you, Passport
Services strongly recommends that you contact the appropriate State
child support enforcement agency to make payment arrangements before
applying for a passport. If you already have a passport, it will be
suspended for non-payment. The State agency must certify to the US HHS
that acceptable payment arrangements have been made. Then, HHS must
notify Passport Services by removing your name from the electronic list
HHS gives to Passport Services. (Passport Services cannot issue a
passport until HHS has deleted your name.) "
Yet another example on how that "restrictions on travel" meme is getting out
there and incorporated into daily life just below the perception threshold
of the masses.
UK is quietly imposing a requirement for travel docs between England and
Achtung! Papieren, bitte! Unless you're coming illegally
from Mexico, in which case, here have a drivers license and be on your
I've mentioned that many banks are changing their wire transfer permissions
of late - ostensibly for 'security reasons" but which we all know is to
preserve cash and prevent bank runs. Fine, soi be it. A reader
wants to know this:
"Just wanted to know something about the limited wiring of money you
talk about. What if I wanted to wire money out of my online trading
account and into my personal bank account? Will they only allow a
certain amount go out at one time, making my transfer take multiple
transfers over who knows how many days? I'm just unclear on what these
limits on wire transfers impacts will have on me personally at this
time. Your thoughts will be greatly appreciated."
Yeah, my commodities guy and I have talked about whether this will screw
people over who get margin calls for over-bank-limits. Best:
Call your bank soon and find out what their policy is!
------ end of clip snip & save -----
Around The Ranch:
For whatever reason, both Elaine and I found ourselves awake at 4 AM today
discussing city names, Don't recall how we got on the topic, but
living near Palestine, Texas has always stuck in my craw a bit.
Palestine conjures up an image of arid semi-desert land, which the East
Texas Piney Woods are not. Bunch of stressed out people with AK's comes to
mind. Walls, barriers, searches, bombings, that kind of thing.
So we kicked around a few ideas:
We would rename Palestine Texas to something like "Tomorrow" or better:
"Opportunity" - some positive things that puts positive energy behind
the city name. Opportunity, Texas sounds pretty good to me.
It would be a kick-ass name from the Economic Development office
standpoint. I can see the PowerPoint now: "...and that's why
we call it Opportunity, Texas..."
We also concluded that many states should face up to 'truth in
advertising' and revise their names. New York, for example, is not
'new' so it should be just plain "York'. Same for 'new' Jersey -
should be just Jersey, which is what half of York already calls it.
The Jersey Meadowlands, for example, or the Jersey shore. And
what's 'new' about Hampshire?
The conversation then got around to how big cities should have names
that reflect the people who live there. Aggressive York is much
for honest than New York, New York. And in California, Pasadena,
Burbank, Hollywood and Malibu could all be merged into Ego, California,
or more politely, Media, California. With a nod to Bullwinkle,
Frost Bite Falls Minnesota sounds real, and so does Simplicity,
Wisconsin. Las Vegas, Pahrump, and virtually all of Nevada could
be lumped into just two townships: Sin, Nevada, and Nuclear, Nevada.
Did I mention that in Clive Cussler's latest book, a western featuring a
character by the name of Isaac Bell who works for a detective agency,
that he lets us in on how Telluride, Colorado got its name?
Shortened from "To hell you ride" Yup, typical Cussler historical
detail. But, you see how that worked out? Honesty got them
A number of other names came to mind that could be used in any state:
"Where's" and "What's". As in "Where's, Idaho and What's Wyoming.
I think we concluded that all of this would be far too candid and, far to
honest to ever be implemented. Who would ever admit to living in
"Backwater, Oregon" or Murder, Michigan, or Hold-up, California? Mandatory
renaming of cities to comply with Truth in Advertising laws makes sense,
though, when you think about it. At least at 4 AM it did...
When I was just a kid, going over to a friend's ranch in Central Washington
(a little 10,000 acre spread of wheat and veggies plus a feedlot operation)
I remember hearing the buzz when George, Washington was founded in 1957.
It's toward the top of the long hill coming up I-90 eastbound from the
Colombia River Bridge crossing at Vantage east of Ellensburg, and nearly
famous for the concert at the Gorge nearby. You can
and see that I'm not kidding about this. Biggest business in town?
Amphitheatre above the river.
And speaking of Ellensburg, Washington, why aren't there more women
named Ellen there? Elaine's sister Ellen is near Spokane, not too far
distant, so moving here to Ellensburg wouldn't be that big a deal, but I
I'm not sure how to start this, but I couldn't find an "Opportunity, Texas".
Seems that Opportunity has a much more positive implications for East Texas
than Palestine, which is associated with many problems. Opportunity
is, after all, what most of us strive for, and it seems to me that renaming
cities to human aspirations could be an important part of getting our
national head on straight again and 'telling things like they are'.
Tuesday November 20, 2007
Some rally this morning, huh? But did you notice how things cooled off
when the Fed minutes were about to pop? We'll, they're out and we've
"The information provided to the Committee on the
first day of the meeting, prior to the release of the advance estimates
of the third quarter national income and product accounts, indicated
that economic activity expanded at a solid pace in the third quarter.
Consumer spending rose more strongly after a tepid increase in the
second quarter, and the pace of expansion of business outlays for
equipment and structures remained reasonably solid. Manufacturing posted
a sizable gain for the third quarter as a whole. In contrast, the slump
in residential investment intensified during the third quarter, at least
partly because of ongoing disruptions in the markets for nonconforming
mortgages. The average monthly gain in private employment also slowed
significantly. Headline inflation eased during the third quarter,
reflecting a decline in energy prices; core inflation continued to be
Employment increased more slowly in the
third quarter than in the first half of the year. Private payroll
employment registered a considerably smaller average monthly gain;
employment in residential construction, manufacturing, and industries
related to mortgage lending continued to decline, but most service
producing industries added jobs at a moderate pace. With gains in
employment smaller and the workweek flat, the growth of aggregate hours
of private production or nonsupervisory workers stepped down from its
secondquarter pace. The labor force participation rate was unchanged, on
average, in the third quarter, and the unemployment rate ticked up to
4.7 percent in September.
Industrial production changed little in
August and September after having posted solid advances in June and
July. Manufacturing output expanded in the third quarter overall at
about the same pace as in the second quarter but declined modestly on
net in August and September. During those two months, production was
damped by declines in the output of motor vehicles and parts. In
addition, output of construction supplies and products fell, likely
reflecting the ongoing decline in residential investment. Meanwhile,
production in the hightech sector rose at a moderate rate.
Consumer spending was well maintained in
August and September. Motor vehicle sales improved, and real spending on
other goods posted solid gains in both months. Real outlays on consumer
services were strong in August because of a weatherinduced jump in
energy services. Solid increases in nominal wages and salaries and lower
headline inflation led to robust gains in real income over the summer.
However, other factors affecting consumer spending were mixed. Shortterm
interest rates dropped and stock prices rose, on balance, after August.
By contrast, house prices continued to decelerate, standards on consumer
and mortgage credit tightened after midsummer, and the turmoil in
financial markets that started in the summer likely exerted some
restraint on consumer spending. Moreover, measures of consumer
confidence had declined in recent months.
The housing downturn deepened as sales of
new and existing single family homes continued to fall. Deterioration in
nonprime mortgage markets as well as higher mortgage interest rates and
tighter lending conditions for prime jumbo loans since earlier in the
to be restraining housing demand. Forward
looking indicators, including an index of pending home sales and
adjusted single family permit issuance, continued to point to a further
slowing in housing activity over the near term. Singlefamily housing
starts declined significantly over August and September. Nonetheless,
with singlefamily home sales continuing to sag, inventories of unsold
homes remained quite elevated. In the multifamily sector, starts
declined sharply in September; however, the thirdquarter reading
remained within the fairly narrow range observed over the past decade.
Orders and shipments of nondefense capital
goods excluding aircraft rose on average over August and September. In
the hightech category, orders and shipments of computers and peripherals
posted robust gains over the same period. Shipments of communication
equipment also rose in August and September, but orders were little
changed on balance over the same period. Outside the technology sector,
shipments of nondefense capital goods excluding aircraft increased at a
solid rate over August and September but orders declined in August and
were flat in September. Sales of medium and heavy trucks leveled off in
the third quarter after a sharp drop in the first half of the year.
Domestic outlays for aircraft likely stepped down somewhat in the third
quarter. Nonresidential building activity remained vigorous through
August after having posted very strong gains in the second quarter;
anecdotal evidence through early October indicated that the recent
turbulence in commercial credit markets had done little to slow the pace
of commercial construction. More generally, surveys of business
conditions continued to point to further nearterm gains in spending,
although reports from business contacts indicated that some firms had
marked down their capital spending plans.
Data on the book value of business
inventories through August suggested that real nonfarm inventory investment
excluding motor vehicles moved down in the third quarter after having
risen at a moderate pace in the second quarter. The ratio of bookvalue
inventories to sales in the manufacturing and trade sector excluding
motor vehicles, which was available through August, remained well below
the elevated values seen around the turn of the year. Purchasing
managers, on average, viewed the level of their customers’ inventories
as about right in September.
The U.S. international trade deficit
narrowed in August as exports increased and imports decreased. Goods
exports were boosted by a jump in exports of agricultural products and
of gold, which more than offset a decline in exports of other goods.
Exports of automotive products fell back sharply after a surge in July.
Exports of capital goods contracted slightly, led by a drop in aircraft
exports. Exports of semiconductors declined, while exports of computers
were about flat. On the import side, the decline was concentrated in
goods; service imports were flat. Higher imports of oil and of capital
goods, particularly computers and semiconductors, were more than offset
by lower imports of automotive products, consumer goods, and industrial
supplies excluding oil.
Indicators of economic activity in the third
quarter for advanced foreign economies were solid on balance. In the
euro area, production and sales picked up in the third quarter from
their secondquarter levels. However, recent survey data, including the
purchasing managers’ index for the service sector in the euro area,
pointed to a possible slowing in the pace of growth. Likewise,
notwithstanding a strong preliminary estimate of thirdquarter GDP growth
in the United Kingdom, more recent surveys pointed to some softening.
Recent Canadian data were mixed, with relatively strong employment
growth and some weakness in retail sales. In contrast, Japan’s retail
sales and exports rebounded in August, and the October Tankan survey
seemed to suggest that the second quarter’s sharp contraction in
investment was temporary.
In emergingmarket economies, recent
information, mostly through August, gave no signs that the turmoil in
financial markets was having a significant negative effect on real
economic activity. In emerging Asia, activity appeared to have remained
robust, although growth slowed from its elevated secondquarter pace.
Economic indicators for Mexico pointed to moderate growth in the third
quarter. In South America, activity was strong, boosted by high prices
for commodities and, in Argentina and Venezuela, by expansionary
macroeconomic policies. Food prices continued to be a major source of
inflationary pressures in emergingmarket economies, and Chinese
authorities took several steps aimed at quelling rising prices.
After having risen rapidly in the first half
of the year, headline consumer prices decelerated considerably over the
summer, largely because of a fall in energy prices. Over September and
October, gasoline prices appeared to have risen only moderately despite
a jump in crude oil costs. Consumer food prices posted further sizable
increases in August and September and
continued to run well above the change in core prices. Core consumer
price inflation remained moderate in August and September and, on a
twelvemonth change basis, was down noticeably from a year earlier. Core
goods prices fell over the year ending in September after having risen
little over the preceding year; noticeable decelerations occurred in the
prices of apparel, prescription drugs, and motor vehicles. In addition,
increases in owners’ equivalent rent slowed noticeably, while rent
inflation remained about the same as a year earlier. The producer price
index for core intermediate materials edged up in September. The
twelvemonth change in that index stepped down considerably from last
year, in part because of softer prices for a variety of energyintensive
and constructionrelated items. Household surveys indicated that median
yearahead inflation expectations inched down in September and October to
about the level observed in the first quarter, and longerterm inflation
expectations slipped to their lowest level in two years. Average hourly
earnings posted a moderate increase over the twelve months ending in
At its September meeting, the FOMC lowered
its target for the federal funds rate 50 basis points, to 4¾ percent.
The Board of Governors also approved a 50 basis point decrease in the
discount rate, to 5¼ percent, leaving the gap between the federal funds
rate target and the discount rate at 50 basis points. The Committee’s
statement noted that, while economic growth had been moderate during the
first half of the year, the tightening of credit conditions had the
potential to intensify the housing correction and to restrain economic
growth more generally. The Committee indicated that its action was
intended to help forestall some of the adverse effects on the broader
economy that could otherwise arise from the disruptions in financial markets
and to promote moderate growth over time. Readings on core inflation had
improved modestly during the year, but the Committee judged that some
inflation risks remained, and the Committee planned to continue to
monitor inflation developments carefully. The Committee further noted
that developments in financial markets since the last regular FOMC
meeting had increased the uncertainty surrounding the economic outlook.
Accordingly, the Committee would continue to assess the effects of these
and other developments on economic prospects and remained ready to act
as needed to foster price stability and sustainable economic growth.
The expected path for monetary policy as
inferred from futures markets declined in the wake of the September
policy action, as many investors were surprised by the magnitude of the
reduction in the target rate. Over the intermeeting period, many
investors came to expect that the Committee would reduce the target
federal funds rate at its October meeting; in addition, the anticipated
policy path further ahead moved down a bit more, on net, over the
remainder of the intermeeting period, apparently in response to
heightened concerns among investors about economic growth.
Early in the intermeeting period, the
functioning of shortterm funding markets improved somewhat, but
conditions in these markets remained strained. The effective federal
funds rate was very close to the target, on average, but the average
absolute daily deviation of the effective rate from the target and the
intraday standard deviation remained elevated. Credit spreads declined
in the commercial paper and term interbank funding markets but stayed
well above longerterm norms. Liquidity in the Treasury bill market was
poor at times. Corporate bond spreads narrowed somewhat, leaving private
yields a little lower. Nonfinancial bond issuance was robust;
speculativegrade offerings increased markedly. The credit quality of
most households remained strong, but delinquency rates on subprime
mortgages climbed further. Securitization of nonconforming mortgages
remained limited, and spreads on jumbo mortgages relative to conforming
mortgages stayed high. Twoyear Treasury yields declined roughly in line
with the lower expected policy path, while yields on tenyear Treasuries
were little changed, on net. TIPSbased inflation compensation was about
unchanged on balance over the intermeeting period despite a sharp rise
in spot oil prices. Stock prices jumped early in the intermeeting period
in response to the cut in the target federal funds rate and some
favorable economic news but later dropped back, leaving broad indexes up
only a bit on net. The foreign exchange value of the dollar against
other major currencies declined notably.
Debt of the domestic nonfinancial sectors
was estimated to have expanded slightly more quickly in the third
quarter than in the previous quarter. Despite evidence that bank lending
standards and terms had tightened over the previous three months,
business debt was still rising strongly, reflecting a continued surge in
commercial and industrial (C&I) lending by banks and robust issuance of
investmentgrade bonds. The expansion of business loans was apparently
due in part to financings for leveraged buyouts that underwriters could
not syndicate to institutional investors. Household mortgage borrowing
was estimated to have decelerated again in the third quarter. M2
increased significantly more slowly in September and October than the
rapid pace observed in August, when the financial market turmoil
apparently drove investors to the safety of M2 assets. Inflows to retail
money market funds and small time deposits were especially strong in
September and October; small time deposits were apparently boosted by
the attractive rates that banks were offering in order to help fund
their expanding loan portfolios.
In the forecast prepared for this meeting,
which was formulated prior to the release of the advance estimates of
the thirdquarter national income and product accounts, the staff revised
up its estimate of aggregate economic activity in the third quarter from
its forecast presented at the September meeting in light of available
indicators that suggested that consumer spending, business investment,
and exports were stronger than previously expected. Nonetheless, the
staff expected real GDP growth to be considerably slower in the fourth
quarter, reflecting steepening declines in residential construction,
reductions in the pace of motor vehicle production, and a smaller
contribution from net exports. Looking forward, the staff expected
residential investment to remain weak in 2008 with modest declines in
house prices. In addition, the staff continued to expect the stress in
credit markets and the appreciably higher oil prices indicated by
futures markets to restrain spending by businesses and consumers,
although the lower foreign exchange value of the dollar suggested some
boost to net exports. On balance, real GDP growth for 2008 was projected
to slow to a pace a bit below that of its potential, and unemployment
was expected to creep up slightly. For 2009, the forecast called for
real output growth to step up to a pace slightly above potential as the
drags on economic activity exerted by the contraction in residential
investment and financial strains were expected to abate. The staff’s
forecast for core PCE inflation was little changed from that presented
at the September meeting because favorable incoming figures on core PCE
inflation were offset by expectations for some limited feedthrough into
retail prices of recent increases in energy prices and for slightly less
easing in resource utilization. The forecast for headline inflation was
in the same range as that for core inflation in 2008 and 2009,
reflecting expectations that energy prices would level off and then turn
down and that increases in food prices would slow to a pace more in line
with core inflation.
The advance data on the national income and
product accounts for the third quarter, which were released on the
morning of the second day of the FOMC meeting, indicated a stronger
increase in real GDP than the staff had forecast, mostly because
inventory investment was estimated to be higher than projected by the
staff. The staff interpreted this information as suggesting some upward
revision to its estimate of output growth in the third quarter, a small
downward revision to its forecast of growth in the current quarter, and
no significant change to its forecast for coming quarters.
In conjunction with the FOMC meeting in
October, all meeting participants (Federal Reserve Board members and
Reserve Bank presidents) provided annual projections for economic
growth, unemployment, and inflation for the period 2007 through 2010.
The projections are described in the
Summary of Economic
Projections, which is attached as an addendum
to these minutes.
In their discussion of the economic outlook
and situation, and in the projections that they had submitted for this
meeting, participants noted that economic activity had expanded at a
somewhat faster pace in the third quarter than previously anticipated
and that there was scant evidence of negative spillovers from the
ongoing housing correction to other sectors of the economy. Conditions
in financial markets had improved since the September FOMC meeting, but
functioning in a number of markets remained strained. Even with some
further easing of monetary policy, participants expected economic growth
to slow over the next few quarters, reflecting continued sharp declines
in the housing sector and tighter lending standards and terms across a
broad range of credit products. The slowing of growth was likely to
produce a modest increase in the unemployment rate from its recent
levels, leading to the emergence of a little slack in labor markets.
Looking further ahead, participants noted that economic growth should
increase gradually to around its trend rate by 2009 as weakness in the
housing sector abated and stresses in financial markets subsided. With
aggregate demand showing somewhat greater than expected strength in the
third quarter and little evidence of significant spillovers from the
housing sector to other components of spending, participants viewed the
downside risks to growth as somewhat smaller than at the time of the
September meeting, but those risks were still seen as significant.
Participants generally expected that inflation would edge down over the
next few years, a projection consistent with the recent string of
encouraging releases on core consumer prices, futures prices pointing to
a flattening of energy costs, and the anticipated easing of pressures on
resources. Nonetheless, some upside risks to inflation remained,
reflecting in part the potential feedthrough to inflation expectations
of increases in energy and import prices.
Financial market functioning was judged to have improved
somewhat since the previous FOMC meeting, but the situation in a number
of markets remained strained, and credit market conditions were thought
likely to weigh on economic growth over coming quarters. In light of
some improvement in the commercial paper and leveraged loan markets over
the intermeeting period, participants were somewhat less concerned that
banks would not have sufficient balancesheet capacity to absorb large
volumes of assets. Conditions in corporate credit markets also had
improved in recent weeks, and most businesses were apparently having
little difficulty raising external funds, as evidenced by strong
issuance of investmentgrade corporate bonds, a pickup in
speculativegrade issuance, and surging C&I loans. Markets for
nonconforming mortgages, by contrast, remained disrupted. Meeting
participants also mentioned that while financial market conditions had
improved, the functioning of some markets remained somewhat impaired.
Indeed, several participants noted some relapse in financial conditions
late in the intermeeting period. Moreover, unusual pressures in funding
markets persisted. Participants generally viewed financial markets as
still fragile and were concerned that an adverse shock—such as a sharp
deterioration in credit quality or disclosure of unusually large and
unanticipated losses—could further dent investor confidence and
significantly increase the downside risks to the economy. Participants
were also concerned about a potential scenario in which unexpected
economic weakness could cause a further tightening of credit conditions
that could in turn reinforce weakness in aggregate demand.
In their discussion of individual sectors of the economy,
participants noted that the recent declines in housing activity—while
substantial—had largely been anticipated. Nonetheless, the potential for
significant further weakening in housing activity and home prices
represented a downside risk to the economic outlook. Most participants
pointed to the deterioration in nonprime mortgage markets as well as
higher interest rates and tighter credit standards for prime
nonconforming mortgages as factors that had exacerbated the deterioration
in housing markets, and they noted that these developments could further
limit the availability of mortgage credit and depress the demand for
housing. Some participants also pointed to downside risks to the housing
market stemming from the large volume of substantial upward interestrate
resets that were likely on subprime mortgages in coming quarters, which
could lead to a faster pace of foreclosures in the near term, thereby
intensifying the downward pressure on house prices.
Participants generally agreed that the available data
suggested that consumer spending had been well maintained over the past
several months and that spillovers from the strains in the housing
market had apparently been quite limited to date. Nevertheless, a number
of participants cited notable declines in survey measures of consumer
confidence since the onset of financial turbulence in midsummer, along
with sharply higher oil prices, declines in house prices, and tighter
underwriting standards for home equity loans and some types of consumer
loans, as factors likely to restrain consumer spending going forward.
Moreover, anecdotal reports by business contacts suggested a softening
in retail sales in some regions of the country. Participants expressed a
concern that largerthanexpected declines in house prices could further
sap consumer confidence as well as net worth, causing a pullback in
consumer spending. All told, however, participants envisioned that the
most likely scenario was for consumer spending to continue to advance at
a moderate rate in coming quarters, supported by the generally strong
labor market and further gains in real personal income.
Meeting participants noted that capital expenditures
had grown at a solid pace in recent months and that the financial
turmoil generally appeared to have had a limited effect on business
capital spending plans to date. Nevertheless, business sentiment
appeared to have eroded somewhat amid heightened economic and financial
uncertainty, potentially restraining investment outlays in some
industries. However, participants noted that conditions in corporate
bond markets had improved since the September FOMC meeting, and that
credit availability generally appeared to be ample, albeit on somewhat
tighter terms. Participants judged that moderate growth of investment
outlays going forward was the most likely outcome. A number of participants
saw downside risk to the outlook for nonresidential building activity,
reflecting elevated spreads on commercialmortgagebacked securities and a
further tightening of banks’ lending standards for commercial real
Data on economic growth outside the United States
indicated that the global expansion, though likely to slow somewhat in
coming quarters, was nevertheless on a firm footing. The continued
strength of global growth and the recent decline in the foreign exchange
value of the dollar were seen as likely to support U.S. exports going
Readings on core inflation received during the
intermeeting period continued to be generally favorable, and meeting
participants agreed that the recent moderation in core inflation would
likely be sustained. The slower pace of economic expansion anticipated
for the next few quarters would help ease inflationary pressures.
Nonetheless, participants expressed concern about the upside risks to
the outlook for inflation. The recent increases in the prices of energy
and other commodities, along with the significant decline in the foreign
exchange value of the dollar, were cited as factors that could exert
upward pressure on prices of some core goods and services in the near
term. Increases in unit labor costs also could add to inflationary
pressures. Moreover, participants expressed concern that some measures
of inflation compensation calculated from TIPS securities had risen this
year, although they viewed inflation expectations generally as remaining
contained. Participants were concerned that if headline inflation
remained above core measures for a sustained period, then longerterm
inflation expectations could move higher, a development that could lead
to greater inflation pressures over the longer term and be costly to
In the Committee’s discussion of policy for the
intermeeting period, members discussed the relative merits of lowering
the target federal funds rate 25 basis points, to 4½ percent, at this
meeting or awaiting additional information on prospects for economic
activity and inflation before assessing whether a further adjustment in
the stance of monetary policy was necessary. Many members noted that
this policy decision was a close call. However, on balance, nearly all
members supported a 25 basis point reduction in the target federal funds
rate. The stance of monetary policy appeared still to be somewhat
restrictive, partly because of the effects of tighter credit conditions
on aggregate demand. Moreover, most members saw substantial downside
risks to the economic outlook and judged that a rate reduction at this
meeting would provide valuable additional insurance against an
unexpectedly severe weakening in economic activity. Many members were
concerned about the stillsensitive state of financial markets and
thought that an easing of policy would help to support improvements in
market functioning, thereby mitigating some of the downside risks to economic
growth. With real GDP likely to expand below its potential over coming
quarters, recent price trends favorable, and inflation expectations
appearing reasonably well anchored, the easing of policy at this meeting
seemed unlikely to affect adversely the outlook for inflation. A number
of members noted that the recent policy moves could readily be reversed
if circumstances evolved in a manner that would warrant such action.
The Committee agreed that the statement to be
released at this meeting should indicate that economic growth was solid
in the third quarter and that strains in financial markets had eased
somewhat on balance. Members also agreed that economic growth seemed
likely to slow over coming quarters, but that the easing action taken at
the meeting—combined with the 50 basis point cut in the target federal
funds rate at the September meeting—should help to promote moderate
growth over time, although some downside risks to growth would remain.
Members felt that it was appropriate to underscore the upside risks to
inflation stemming from the recent increases in the prices of energy and
other commodities, even though recent readings on core inflation had
been favorable. While the Committee saw uncertainty regarding the
economic outlook as still elevated, it judged that, after this action,
the upside risks to inflation roughly balanced the downside risks to
At the conclusion of the discussion, the Committee
voted to authorize and direct the Federal Reserve Bank of New York,
until it was instructed otherwise, to execute transactions in the System
Account in accordance with the following domestic policy directive:
"The Federal Open Market Committee seeks monetary and
financial conditions that will foster price stability and promote
sustainable growth in output. To further its longrun objectives, the
Committee in the immediate future seeks conditions in reserve markets
consistent with reducing the federal funds rate to an average of around
The vote encompassed approval of the statement below
to be released at 2:15 p.m.:
"The Federal Open Market Committee decided today to
lower its target for the Federal funds rate 25 basis points to 4½
Economic growth was solid in the third quarter, and
strains in financial markets have eased somewhat on balance. However,
the pace of economic expansion will likely slow in the near term, partly
reflecting the intensification of the housing correction. Today’s action,
combined with the policy action taken in September, should help
forestall some of the adverse effects on the broader economy that might
otherwise arise from the disruptions in financial markets and promote
moderate growth over time.
Readings on core inflation have improved modestly
this year, but recent increases in energy and commodity prices, among
other factors, may put renewed upward pressure on inflation. In this
context, the Committee judges that some inflation risks remain, and it
will continue to monitor inflation developments carefully.
The Committee judges that, after this action, the
upside risks to inflation roughly balance the downside risks to growth.
The Committee will continue to assess the effects of financial and other
developments on economic prospects and will act as needed to foster
price stability and sustainable economic growth."
Votes for this action: Messrs.
Bernanke, Geithner, Evans, Kohn, Kroszner, Mishkin, Poole, Rosengren,
Votes against this action: Mr.
Mr. Hoenig dissented because he believed that policy
should remain unchanged at this meeting. Projections for the U.S. and
global economies suggested that growth was likely to proceed at a
reasonable pace over the outlook period. To better assure that outcome,
the FOMC had moved rates down significantly at its September meeting. At
this meeting, inflation risks appeared elevated and Mr. Hoenig felt that
the target federal funds rate was currently close to neutral. In these
circumstances, he judged that policy needed to be slightly firm to
better hold inflation in check. Going forward, if the data suggested the
Committee needed to ease further, it could do so. He also recognized
that liquidity remains a nearterm challenge and that the Federal Reserve
would be prepared to act if needed. Mr. Hoenig saw the risks to both
economic growth and inflation to be elevated and preferred to wait,
watch, and be ready to act depending on how events developed.
The Committee then resumed its discussion of an enhanced
role for the economic projections that are made periodically by the
members of the Board of Governors and the Reserve Bank presidents. At
this meeting, participants reached a consensus on increasing the
frequency and expanding the content of the projections that in the past
have been released to the public in summary form twice a year. They
agreed to publish with the minutes a summary of participants’ economic
projections made for this meeting and to release a press statement
describing the plan for the future. The release of more frequent
forecasts covering longer time spans and accompanied by explanations of
those forecasts was seen as providing the public with more context for
understanding the Committee’s monetary policy decisions.
It was agreed that the next meeting of the
Committee would be held on Tuesday, December 11, 2007.
So will they have to lower again? Almost certainly. Will that
cream the dollar? Oh yeah. But, this is Fed in a Box time as the
market decline from now to the end of January could be severe. A few
minutes after the decision, the market was down about 60 points by the Dow.
Could it be this morning was the Thanksgiving Holiday rally?
I might as well hang out a sign right now that reads "We had bound to bounce
from somewhere". With the futures up a tad, we very well could
see a shortterm bounce that will make a few of the wellheeled feel good.
But, don't worry, the smiles may be temporary. There are millions of
Americans who are fed up with what the
linguistics team cited over a
year ago as emerging "cognitive dissonance"; in other words, what the eyes
and the checkbook are encountering is nothing like the political "reality"
being sold by the Powers That Be in corpgov.
Just to give you a sense of how my inbox reads these days, I mean besides
the antibank run moves of major banks to prevent you from moving 'x' number
of dollars out by wire transfers over 'y' numbers of days, or so much per
(runs can happen,
see Northern Rock story); here's a dandy with the subject line:
"No Kidding: I'm Mad as Hell
Hi George: The war on the middle class is
becoming more obvious each day. The 2008 Social Security benefit will
increase 2.3%. How did the Soc Sec Admin. figure a 2.3% increase when we
are told by the mainstream media that inflation is 3.9%? I predicted
about 3 years ago that if Soc Sec increases continue less than 4% and
Medicare deductions rising each year the net benefit result will be in
the minus column instead of plus. In my own particular case for 2008 my
total increase will be 41 cents more than this year after INCREASE
payments for Medicare, Medicare Drug Plan D, and supplemental insurance
premiums. My wife's increase amounted to 59 cents. With inflation at 11%
+ the dollar falling and Fed interest rates lower it appears we will
heading toward the poverty level. Any thoughts or comments George???..
["Fight and you may die, run, and you'll
live...at least a while. Tell our enemies that they may take our lives,
but they'll never take ...OUR FREEDOM" (from Braveheart).. Ron Paul for
Well, one has to be very careful here not to criticize the United States
(which I don't, as it's the finest set of ideals anywhere, embodied in the
dandy Constitution and all) but being critical of corpgov and the banksters
is a different matter;
the threatened HR 1955 which would make dissent a crime is pretty much
a spoton hit for the
linguistics team which has us presently in an Americanized version of a
pogrom, although directed at Constitutional believers rather than a
religious or ethnic group. So I need to speak carefully here.
presently faced by government is this: The US dollar as been "found
out" by investors all over the world who have awakened (and are still doing
so) to the idea that the Buck is backed by little more than more paper.
Gone are the words "Full Faith and Credit" of the US government off our
currency, and what remains is the assertion "This note is legal tender for
all debts public and private". "Sez who?" many are asking.
What's got the
banksters scared (although the futures indicate a bounce at the open this
morning) is that
the Courts seem to be signaling that at least in Ohio, the groups that
bought up those collateralized mortgages may not have standing to sue for
foreclosure. While in the shortterm this may mean that some
families facing foreclosure may get to stay in their houses a while longer,
there are probably teams of lawyers trying to figure a way to drop kick 'em
out and get back possession of homes all over the country.
From a policy
standpoint, this frames out as "We need to keep the paper moving" and in
order to do that "Paper needs to be secured by something more than a
The international money rates are not waiting for appeals, though.
You'll see that this morning the dollar has broken well under 0.68 Euro to
.6765 as I write, and as a consequence of that, things priced in other
than dollars are showing some strength. The market bounce today
may simply represent a market repricing of the underlying book value of NYSE
companies to their equivalent value in Euros, more than any prospect of
HP's announcement beating the street by a tad certainly doesn't hurt.
Gold and Silver go up as well, but then
is oil, which like a party pooper puts a cap on things.
In this week's
Peoplenomics report I offered the view that as distasteful and Americans
will likely find it, we may be getting hemmed in to a situation where cash
(as we know it) will have to be rationed. The new limits on wire
transfers could be viewed as just the first section of fence designed to
contain a coming stampede of Americans to assets other than paper.
outlook for trading over the next week or so would be a rally going into
Turkey Day, but then as we return Friday and into next week, (This
is not investment advice, only commentary on emerging trends in news stories).
I can almost sense a quickening of international withdrawals of support for
the dollar. This, in turn, will push up the metals and oil, which in
turn will deepen the expected recession, and put pressure on the Fed to
lower nominal rates below the rate of inflation (they already are, depending
on your measure of inflation; checkbook or BLS, or
From there, we enter the Never Land that Japan got into in the late 1980's
and from there the Big Slide is underway.
One has only to look a
maximum zoom out on the Nikkei 225 to see it went from about 40,000 in 1990
to 7607 in 2003.
of such an event in the US markets, with a major index like the Dow holding
on to only 19% of its price in a 1213 year period could portend, based on
our recent 14,280 intraday high argues for 2,715 on the Dow.
UrbanSurvival.com web site (along with the
www.peoplenomics.com site) has its
roots in my MBA capstone project years back. A long time ago, (mid to
late 1990's) the University of Colorado's Center for a Sustainable Future
Longwave Economics group vigorously discussed at incredible length the whole
notion of the Kondratiev (Kondratieff) Long Wave theory.
The Kondratiev Wave
argues that regular booms and busts in the economy happen every6 4856 years
with a maximal cycle length of about 64 years.
wave, the economy had trough wars, e.g. wars that end significant
depressions (take WW II, for example which finally ended the Great
Depression) and "Peak Wars" such as the Vietnam war.
position on the Long Wave is that while Kondratiev was right about the wave
in general, the key thing to grasp is that the wave length was only stable
so long as the underlying socioeconomics were stable. While his work
was based (largely) on grain prices in Europe dating back to the 1200's,
since his claims in the mid 1920's, a lot of things have changed.
The two most
significant changes have been the world reserve currency had never been
through a serious debasement such as the US dollar has, being stripped of
its purchasing power by issuing more paper than production dictated (not to
mention that 'money' created by debt is never backed out of the system once
the debt is repaid).
The other key
thing that has changed is that people are living a lot longer. The
average length of the K Wave in early times seems to have been roughly equal
to the average lifespan of a human, which is now considerably longer in the
West than it was in Middle Ages Europe. Why couldn't the wave
therefore get longer?
On the other
hand, there are still economic bounds, beyond which a currency can not be
diluted, as a college and I proposed a few years back that a maximal
timeline for systematic inflation was likely around 83.5 years.
I hope you can
see my fascination with current developments. On the one hand, I have
learned colleagues who hold even now that the K Wave is mechanistic and that
the mini Crash of 1987, coming 58 years after the 1929 Crash was the Big One
and the wave reset.
further argument to be made that the Gulf War I was actually the trough war
that would line up with this scenario, and that because the first trough war
didn't really get us out of economic straits, we needed to continue it with
a new and improved (larger impact) long wave trough war that we're now in,
both as the War on Terror, which serves as a type of Civilian Conservation
Corp/WPA in terms of artificially creating government jobs, and the expanded
Gulf War II (OIF) which destroys resources and which has also stimulated the
A good argument
perhaps, but I don't buy it. The 1987 mini Crash did not cause the
widespread repudiation of debt required to reset the Crash Clock, in
my view. As a result, I argue that the crash clock was just pushed
back a bit.
With our work
summarized in the January 2001 report
"It Maybe Wasn't Nixon" ,
my colleague's most revealing chart that forecast a decline from late
1999/early 2000 to 2001/2002, a bounce to 2007 and then a decline from there
to as far out as beyond 2012, seems to be holding up rather well even
So while others
were arguing for the mechanistic interpretation of Kondratiev, here I am,
the People's Economist screaming "It's
all about the saeculum! And bounded by maximal compounded interest
rates, you fools!"
are not in my view, mechanistic, any more than the stall speed of a wing is
fixed. Just as a wing's lift is determined by variables such as
airspeed, pressure, moisture content, and temperature, so too I argue that
Kondratiev Long Waves are functions of currency debasement, average lifespan
of participants (the saeculum), and rates of compounding, which as any fool
in the fixed income market would have to admit seem to have cyclical
How does all
this work out? Well, if the devotees of mechanistic Kondratiev
are right, there won't be a crash, there will only be a modest decline, and
the Gulf Wars will be won, with the US resuming its place as world reserve
banker. Nice dream, but I don't think so.
likely scenario, and frighteningly, which seem to fit with the long term
linguistic outlook, is that we start to crash now (Nov. 22 is when emotional
release rolls around and who knows what the headlines will be that start
things off), and by the end of January the economy will have been pretty
well kicked down . In an extreme, I don't rule out bank rules here in
the USA and then we get into a small building period and then real global
war looms as something that by 2012.5 has caused a real resetting of the
economic clockworks. By survivors.
would please me more than to be wrong, and to see the mechanists 'win' the
argument, my Peak to Crash chart isn't looking especially good right now.
And those two darts I threw at November 29 and 30th as potential 1,000 point
loss days seem as good a guess now as they were when I threw them a week or
But don't let
any of this bum you out. It's, as the time monks so aptly put it "Just
all a fiction and projections into the future. Not our fault if the
Universe decides to follow our storyline..."
My deflationist pal Jas Jain may be early, but if human lifespan has any
influence over Kondratiev cycle lengths, Jas will only be a little
early, which is a whole bunch better than being a little late, to buy bonds
and lock in purchasing power.
Our plans? Eat turkey. Dressing. The 'fixing's'.
Make a cobbler. Drink champagne. We ought to know too soon who's
right: the mechanistic interpretation of Kondratiev, or the Saeculum/maximal
compound interest rate integration.
I don't have to tell you how I'm shading my bets. There's a new theory
bouncing around in my head: In order to count as a proper Trough War,
the worst of humanity gets let out of the bottle for a while. In
current technology, that would be nuclear weapons. With my radiation
survey meter in hand, are you willing to place a bet that I won't have use
for it between now and 2013? Trough Wars serve two functions: destruction of
excess capacity and repudiation of debt & malinvestment. And sorry,
but 1987 doesn't cut it by these measures: We ain't seen nothing yet.
So "Thanksgiving!" "Happy" optional.
Restriction on Travel
Now...like we need more Nanny State,
we have the TSA telling us to 'pack neatly.' Why bother?
They didn't repack my things neatly...On the other hand, no carryon's
sounds like a good idea until you have a laptop with your whole life on
Restrictions on Travel, II
Hate Crimes Up
Nearly 8% says a new FBI report. I can hardly wait for someone to
figure out "It's not 'hate crimes', it's affinity group negative
identification marketing and retribalization at work..."
Safe Cities, Unsafe Cities
Best: Mission Viejo, California. Worst? (Need to ask?) Detroit.
are reading less. Ditch the cell phone and see what happens...
Email of the Day
"Should your government (or mine) impose
digital cash, why would you remain a citizen of that state? For that
matter, why do you persist in residing in the US when you are informed
of the state's fascist tendencies and implementations?
I read your site daily George but the fact
that you continue to reside in the US (presumably) without a plan to
emigrate in the near term detracts from your otherwise interesting
prognoses because it reveals a blind spot that you refuse to address."
America (*the one defined by the Constitution and Bill of Rights) is still
the best shot at freedom there is. I stay to defend both. When
defense is not possible, out comes the strategic retreat plan.
Around the Ranch
Trying to catch up on a couple of subscriptions that I need to set up this
morning for Peoplenomics. Living 'life on the egg timer'; for phone
calls. Consulting clients the exception. \
Finally gave up on making QuickBooks 2006 play on Vista and ordered 2008 and
BTW, TurboTax for 2007 is now shipping out of Amazon so guess where Turkey
Monday November 19, 2007
OPEC: Bye Bye Buck
As I see it, the most important story out over the weekend, and thus the one
with probably the least amount of LameStreamMedia is the position of OPEC:
interested in something other than [US] dollars for oil.
Also of note,
a group within OPEC including Venezuela and Iran that are for using oil to
stop 'exploitations' and 'imperialism.'
Although several subscribers to my in depth analysis at
www.peoplenomics.com don't like
where this seems to point, can't say that I blame them, I discussed this
weekend how the implementation of a 'purely digital' US dollar could
ease some of the financial problems looming looming from 'dollar death',
allowing policy makers to implement a twotiered currency (domestic and
external) while at the same time providing for continuous reductions in
purchasing power. (summary here).
There are compelling reasons for banking interests to more quickly promote
the idea of an 'alldigital' currency. Worrisome: It would quickly get
beyond government's remaining control and would put financial interests in
charge of everything, not to mention the potential for abuses of individual
rights, that then again, that's the whole point of being the Powers That Be,
What's billed as an
accidental explosion has killed 28 and left 12 missing at a natural gas
pipeline in Saudi Arabia.
And while the administration/war hawks keep trying to come up with an excuse
to star a shooting war with Iran (like Iraq is not enough of a mess to deal
we have to note that former Secretary of State Colin Powell says Iran is
far from a nuclear weapon. But hey, don't let that stop the
Seems Powell is not the only military man thinking Iran is a no go.
head of the UIS Central Command, Admiral William Fallon has reiterated that
there is not a military strategy against Iran.
I think I've mentioned this before, but worth repeating: If a solid
military man like Fallon is suddenly reassigned or retires, that'd be the
time to fill up the gas tanks and duck.
With the dollar teetering, and an 'emotional release' period about to start
in the next couple of days, we have to wonder whether we'll see a (false
flag?) terrorist attack on USA soil, or a major increase in 'terror
warnings' in the next few days, just to keep the whole WOT top of
consciousness for the sheeple.
In the UK, voters are facing a different kind of problem; I told you
last week how people by 2009 were going to have to answer 'correctly' a 53
question survey before they'd be allowed out of the country (remember the
restrictions on travel meme building, right?). Well, now, one of Gold
Seller Banker turned PM Gordon Brown's terror advisors says the plan to
increase terrorist suspect detention times from 28days to 56 or 58 is a bad
Not that you should worry if you're in the USA, as habeas corpus is already
As the Holiday shortened week begins,
we note that the price of oil is rising, as no relief for the debt burdened
dollar's defrocking seems to have come forth over the weekend, and
reports continue that gasoline prices are starting to catch up to the
increasing price of crude.
Be watching events over the next couple of days (through Friday/Saturday)
for a change in the 'flavor of the news' that will accompany the shift from
'emotional building' to 'emotional release' which may feel like 'emotional
Brazil's New Oil
There's also some discussion of
a big oil
find of Brazil that could be big enough to bring them into OPEC.
And if you have oil, what do you need to defend it?
a nuclear submarine?
If we had just hung on to those
subs busted up at Bremerton a few years back, maybe we could have
recovered some taxpayer investment...but no one asked me.
A Japanese fleet is going out whaling and planning to kill as many as 1,000
of the mammals. So, Japanese cars and HDTV is off my list, as maybe we
need to vote with our wallets so their policy makers will hear us...
Millions of people are now homeless in Bangladesh from last week's cyclone,
the worst in a decade. And
the death toll
is over 2,500 by reports with many more expected.
Rubber Stamp Court
When you're a strongman like president Musharraf in Pakistan, and you are
busy putting off elections,
seems it's easy
enough to reform your supreme court in the country so they will
dismiss challenges to your authority. Question is: Are they
"Prototyping fall 2008 here?" we have to ask.
Getting the Lead Out
The FBI has egg enough to go around as a controversial technique to analyze
lead from bullets has been found inaccurate yet
hundreds of people are behind bars and the FBI isn't doing anything to right
the potential wrongs, figures a joint Washington Post and 60 Minutes
Fiend's Super Bear site has a couple
of great links to read while the turkey thaws out: "Credit
Crisis meltdown is a Prelude to Global Economic Depression"
(Sounds like a headline I would write. How about this one: "
NY Stock Exchange Contracting Margin Debt Levels Sending Bearish Message."
Not much in the way of economic news; leading indicators may slip, and the
Fed Minutes out tomorrow ought to work better than tryptophan if you can't
I am expecting to put up a couple of special chart updates for Peoplenomics
subscribers this week: One will be at the close of business on
Wednesday so you can ponder the 'peak to crash' chart while snoozing off the
turkey & dressing. Then, on Friday, if the market gets really
exciting, as I worry it may, I might put up an update of the 'peak to crash'
chart several readers have asked.
----clip and save section----
More on Coops
From a reader:
"I would like to share with your readers a
couple of suggestions for low cost food stores. First check within the
Amish/Mennonite communities. They tend to specialize in bulk foods.
Second, check with Country Life Natural Foods. Their link is:
They deliver to you free of charge with a
$400.00 minimum in most route areas and $500.00 in out lying areas. The
nice thing is you can order once a year or every month. There is no
required or mandatory monthly usage! Right now they deliver to the
states of Michigan, Missouri, Wisconsin, Illinois, Indiana and
Minnesota. Check with them directly to find out which route you would be
on and if they make other stops. They are open on Sundays but not from
late Friday afternoon through Saturday. They sell wholesome healthy
foods in small to bulk quantities, most of which are organic. Hope this
helps some of you in the Midwest obtain great quality low cost storables
here in the Midwest.
Contributions to our "Coping" section are welcome As we say in my family:
"If you can't be generous and share when times are still good, when are you
going to be able to?"
Around The Ranch:
Elaine and the Night Visitor
There I was, sawing the ZZZ's at 3:55 AM when Elaine woke me up to
urgently report "George, I heard something on the back porch and there's
a great big possum out there! The cats are out there! What should we
"uh...turn the light on?"
"I did. He's still there and he's huge."
Hmmm...wake up brain.... armory check: Thinking, come on
brain: Shotgun would make a mess on the back porch, buck shot buck shot
down the stairs would leave a mess in the carport. Out in the yard
maybe? SKS? No, that'd bring coyotes. Night vision and Doubletap from a
'9 away from the house maybe? No, any of these would scare the
neighbor's rabbits to death and the personal threat level is zero so
scratch firearms... hmmm...what else? Slingshot? Not awake enough.
Mongolian hunting bow? Not strung. Knife? One
throw....hmmm... got to be something....ah...here we go!
"Tell you what, let the cats in, and when the cat food is gone, the
possum will leave."
Sure enough, within 5 minutes, the possum was gone, the cats safely
alone, and a back to the ZZZ's after first making a note to pick up a
cheap CD burner to strip the laser out (more powerful than the pointing
devices you can buy at Office Box, and add another layer to the
electronic defenses defenses around here. Second note: don't leave
the turkey on the back porch to defrost tomorrow. Bring ball bear supply
over from shop. Bring cat dishes in at night. Is it time to
get up already?