This economy is a what?
Replaying 1929: Business, Financial, and earth change news
Updated: Sunday September 14, 2008 09:00 CDT
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Storm? Oh Yeah...
A large number of people have been writing in to ask how things went here at the ranch over the course of Hurricane Ike's visit. Honestly, much better than we could have hoped for. The peak sustained winds here were probably on the order of 35-40 knots with an occasional higher gust. A few li0mbs down, but nothing like the localized tornado in the spring which took down about a dozen big trees on the property - we'll get out and do a more formal survey today after a big country-style breakfast.
Much of the storm preps included things like cleaning out drainage ditches so the water flowing off the mountain (big hill=mt. in Texanese) to the north of us. The water all stayed in channel. Got the brush forks back on the tractor just in case, the chain saw was fired up and the 2-stroke mix and bar oil placed at the ready, but the only need for it was as a series of amulets to frighten off th storm monsters.
Once the winds started to get serious - about 10 AM, I got comfortable with plans for what to do if the winds hit certain threshold/response levels and then settled into my favorite windowside chair to finish Dmitry Orlov's "Reinventing Collapse" - which seemed appropriate, since the power went out in the morning.
Power was back up by about 6:15 PM and life quickly got back into the groove.
Our mail didn't get delivered on Saturday, at least as best I can tell. The neighbor across the road had his 'red flag' on the mailbox up (it didn't move, the contents apparently still inside) and neither of us got anything in the mail, so we can only assume that the "sleet, snow, and hail..." stuff from the Post Office didn't apply to taking life in hand out on the back roads hereabouts.
About 1 PM, while I was snoozing/reading, Elaine and her visiting brother Panama, decided to build a tent for the goats because those spurts of 2" an hour rain had worked itself into the goat barn so rather than have then stand in mud, they'd put up a "goat tent". Humanitarians...nice.
Being over some really sandy soil, it drained better, but the flip side is that I reckon in a day ors three, the goats will demolish it - such is the nature of temporary house/shelters for ornery critters like goats.
The side burner on the BBQ was the most enjoyed tool of the whole event. A little reheated homemade stew with a good serving of broth goes a long ways toward boosting personal energy levels when soaking wet.
The only equipment failure was the genset power head (which we have a replacement for anyway) so that goes on our 'todo' list this week. And because the solar panel install hasn't been done yet (I've only got so much time) we didn't have power when the lights went in the morning.
Still, the new inverter/charger was ready, along with a fully charged string of batteries, but honestly, I figured people lived for how many thousands of years without powering up a satellite internet connection?
The private microwave link to the fiber is down - figure it will be back tomorrow sometime - or maybe even later today as the tower becomes safe enough to climb. So this morning, we're on the WildBlue connection, which is what redundancy is all about.
Sorry that we can't report anything more dramatic, but it was only a tropical storm - and a quickly dissipating one at that, once it got up to this end of Anderson County.
On the other hand, some friends down in what used to be Galveston. An email from a friend included this snip:
The bad is that I expect when the damage assessments start to coming in this week that we will indeed see that major refining and oil processing damage has occurred as a result of the storm and that energy supplied from the Houston area will begin to dry up as local 'buffering' tanks are depleted over the coming week or two. When that happens, folks up north will be in an even worse position vis-à-vis the events to come (linguistically) in early October.
If you can picture a financial melt-down trying to happen at about the same time restrictions on travel pop up from falling energy availability and a sudden reversal of the Dollar's recent strength, that'd be a decent expectation set to hold. You'd only need to throw in more flooding on the backside of events - and maybe a dam collapse plus rationing coupons for food and gasoline, and you'd have about as big a mess as you could brew up.
OK - drop by for our usual Monday report - for now, back to working on this weekend's special in depth report for subscribers to Peoplenomics.com - "Where's the Exit?" where we'll cover things like exit taxes, dual citizenship, and a host of other 'touchy' issues.
Friday September 12, 2008
PPI: Deflationary Collapse In Sight
The end of what monetarists would call the Von Mises 'crack-up boom' may be coming into sight with this morning's release of the new Produce Price Index figures from the Bureau of Labor Statistics.
Here's a dandy little table for you to mull:
The last line of the table should give you a hint: Producer Prices at the Crude Goods level has just driven off a cliff. OK, yeah, they've been up 38% on an unadjusted basis in the past 12-months. But this? A deflationary disaster pulls into view.
In the very short term this should be catnip for the markets. But in the long term, watch closely: Capital is being destroyed and in order to stop the spin, we're likely to head down what I call "Japan Road" - which is where the Japanese in 1989 (and shortly thereafter) had to take interest rates to zero (and beyond) in order to halt the slide. Even so, they saw the Nikkei go from over 40,000 to around 10,000.
Extrapolate that out to the Dow over the next five or six months and what do you get? I mean what's a quarter of 1,4000? Dow 3,500? If you're a Peoplenomics.com subscriber, go reread last week's column on what happens when the fixed income markets tank and they offer ways to lock in extraordinary gains (25%) and what that pushes the P/E of stocks to: 4. And with a PE of 4, the Dow 30 less GM is what? Well under 5,000. And with GM? LOL, you don't want to know or you'd subscribe.
OK, buying that bottle of wine for my deflationist Pal Jas Jain is back on my list of things to do. Damn.
But, who told you "Everyone out of the Street!" "Flee paper assets!"
Meantime, the meltdown in the banking sector continues with rumors that Bank of America may pick up the remnants of Lehman.
Just a reminder, you want to drop by the government's FDIC web site, the Office of Thrift Supervision and the Credit Union sites after the close. It's Friday - so the bank failures are announced after market close today. Last week's loser: Silver State Bank of Nevada.
The Great De-Levering is on!
The Hunker at the Bunker
More than a few folks have opined that dropping out of the corporate life and moving to the outback/East Texas Mountains (hills, but Texans do take liberties on such) was an escapist move on my part. But, it was a carefully considered move, and done before land prices tripled - and they've stayed up extremely well. Perhaps cognizant of the fact that population densities worldwide actually are getting to the point where the old saw "They're not making any more of it" is coming true. And what humans don't occupy, the PowersThatBe (PTB) and trying to privatize, wetland, nationalize, set-aside, eminent-domain to death, but that's not our focus this morning.
Nope, what we need to think about is the 'wetlands' issue in southeast Texas over the next couple of days as hurricane Ike makes landfall.
Last night, as I went up to Tyler, Texas, about 40-miles uphill from the ranch, I noticed that gasoline prices were higher on the south end of the route. In fact, on Highway 155 in Noonday, Texas, the price on the signs was $3.55 a gallon, while heading out to Tyler-Pounds field from the loop in Tyler, the price was down at $3.47. No problem figuring out the economics of which station to fill up at, eh?
Stories like the one from CBS "Houston told to 'Hunker Down" capture a fair piece of the local mood, but to get the full picture, you need to visit places like the Interior Department's Minerals Management Services (MMS) which reported on Thursday that:
So, yes, the shut-in energy will be an issue to one degree or another. MMS also reported on Thursday that there was some damage from Hurricane Gustav in the Gulf of Mexico (GOM) but it wasn't much:
This morning oil is reported up a couple of bucks, but the major inconvenience so far is that gasoline prices all around the Midwest are trending up on Hurricane Ike worries. And, when oil goes up, seems lately the precious metals have bounced with it, so lyeah, gold and silver have halted their 'crash mode' for a while.
Coup? Us? What Coup?
Don't know why this is not making huge headlines in the mainstream media (MS), but I have my suspicions. The U.S. envoy to Venezuela has been tossed out on his ear by president Hugo Chavez with allegations of a coup plot, says the NY Times.
Now let's all put on our thinking caps and get down that ever-so-imporant first cup of coffee and ask "Geee, why would we do that? Plot against Chavez, et all?"
Hmmm... Do you think it might have something to do with the visit of a couple of russian bombers to the country? The country which the CIA world fact book says has 79-billion barrels of proven oil reserves and is exporting something like 2.2 million barrels per day? Why, of course not! And, I'm the Pope.
Former Russian president Vladimir Putin may have it right: George Bush isn't such a bad fellow - it's just the people he has surrounded himself with. It's the Court that makes the King, he figures.
Checks and Bombs Department
Story in Israel is that "Israel asks U.S. for arms, air corridor to attack Iran." So far, people in Washington are holding back. But, this being the high budget campaign period, I wonder how long that will last. Figure it's only a matter of time.
The Runs: War Drums
Watching the presidential contest, people seem to be quick to overlook the 'war position' of the candidates. Simply put, there is an 'end the war' candidate in sight. Instead, both Obama and McCain seem quite inclined to continue whatever war(s) they inherit.
But even more worrisome is the headline that Sarah "Palin would support war with Russia".
Now, don't get me wrong - I'm as much in favor a good war - or three - to keep the defense industry going and the campaign contributions flowing as the hey guy. Yeah, and we'll even ignore a good chunk of the facts about the Twin Towers case ands keep promoting the idea that a WOT there will keep militants so busy they won't attack here. (No, that probabl;y isn't why they haven't, but that's a two-beer conversation.)
What concerns me is that when people start bandy about concepts like 'war with Russia' they seem to miss the point that when you dump enough radiation into the biosphere there are no winners. There are been two - count them - two versions of the movie "War Games" that go to this concept, not to mention the whole nuclear winter concept. Don't these people go to movies or read?
At a very real level, war of any meaningful magnitude with Russia is a lot like being able to successfully commit suicide, or more likely, planetary genocide. But, I guess if you read the 1976 Club of Rome report, then you know earth is overdue for some population thinning...but where's the chance to vote no on such things?
Not to worry says Sarah - this five minute's media darling - she's ready to step in as President should the need arise.
Linguistically, McCain health issues are expected to resurface shortly - say over the next three weeks. Of course, if you want the real-deal on the future, you'd subscribe to the HalfPastHuman web bot project - which will post its first of six parts looking out to July of 2009 - the summer of hell, but the rest of the planet will get there by and by...
The republicorp buzz is that somehow Karl Rove will be brought into the fray when the McCain health issues arise.
Speaking of the tax & oil party's absurdities: "John McCain offers Barack Obama a cabinet post" says one headline.
Coping: The Police State Retirement Option
I've always figured that if someone was dumb enough not to protect their head with a helmet, there wasn't enough inside it to bother protecting. I'm just saying...
They must not have much real crime in Riviera Beach.
A Chicagoland "Teacher used Muslim student as a Terrorist example" reports the CBS-TV outlet there..
In South Carolina, we read how "Boy suspended for using broken pencil sharpener."
In a land which has exported so much of its manufacturing to Third World countries, playing the labor/wage rate differentials, it's reassuring to know that there's no limit to the number of rules, regulations, and laws that our lawyer-heavy country can invent.
Just as the US has invented serial bubbles in internet technology companies, and more recently the Housing bubble, it seems to me that we are in a prime position to build a new bubble in Bureaucracy. Why, we've already got the world's highest per capita incarceration rates, so all we need are just a few more laws - and since most of the country's elected representatives are lawyers, that should be a snap.
Here in this part of East Texas, locking people up and holding them is a Big Business. In fact, we have prisoners here from a number of states. The fellow who delivered some goods from one of the local building supply outfits told he he had been working for a couple of years (since his last delivery out to our place) in the 'close custody' unit at one of the local prisons, but left over a fight where he was jumped by one of the inmate and he responded with serious force.
So, he's back to delivery lumber and much happier about it.
Rehabilitation that doesn't work seems like another fine growth industry to get into. I mean along with building more and more prisons. Like that $385 million that Halliburton's got for detention centers a couple of years back.
If we can lock up enough people, those who are not locked up will have a job watching those who are. It's not quite that way in East Texas, but the DOC is one of the biggest employers in this part of the state.
It's not a 'bad thing' - it's just a 'thing' to watch. Every time a new law is passed in Texas I ask myself "Gee, wonder what this will do to the prison population over at the Coffield Unit?
The prison business is a pretty interesting business model: Coffield, for example features a cow/cal operation, some egg laying, feed mill and grain storage, security animal, they raise some pigs and operate a metal fab plant, and so forth. Why, there's even a "National Correctional Industries Association."
Almost like a feudal society with no taxes and in some cases very nearly self supporting.
All of this gets me around to a very interesting proposition to lay before you today:
In a Country where healthcare is becoming largely unaffordable, where jobs are increasingly hard to find, and where the smallest slip up can land you in the iron-bar hotel, anyway, how long before a large number of people who are unable to afford retirement go out and start committing crimes so they can be locked up and get 'free room and board' (not to mention healthcare and a job) as guests of the state?
Granted, it's a little more extreme than moving to 30-acres in the sticks, but when the health starts to go (as it will sometime) free room, board, medical, job training (with no student loan to pay back!!!), no income to be taxed, or property to be seized...well, it's out there are my wildest of contingency lists.
If the State is going to rob me of short positions by intervening in the markets, in the name of 'economic stability', I figure the least I can do is come up with ways to get something of value back. Sending billions of my tax money to various Middle East countries, and picking a fight with Russia over Georgia is not my idea of building a better world. As a quid pro quo, maybe I could become an expense item from the state on some distant date in my declining years.
No, I'm not trying to glorify prison life, but did you ever see the movie "The Last Castle" with Robert Redford in it? Came out in 2001. Worth watching.
Either that, or I have to run for public office. Maybe get appointed to a regulatory job and then land a fat payback Board of Directors job. Happens in lots of industrials. Flip side of the same coin?
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Around the Ranch: Stormin'
Lots on the agenda today - I mean besides client work. Have to fire up the new inverter so we have power, change oil on the genset and test run it - new battery to install and a 2-watt solar charger for it that might as well be mounted, too. Then there's getting the chainsaw oiled and a fresh batch of 2-cycle mix ready, top off the bar oil reservoir. Test firing, of course.
It's not a matter of IF we are going to lose trees with Ike wondering by about 20-miles (or less) from us. It's a matter of how many. Top off the tractor's fuel and hydraulics. Check that the satellite uplink is in top shape, and then change out the water in the storage barrels. I'll try to get some pictures posted next week, if it amounts to anything more than just a few trees down.
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Broke, Broker, and Broken
Yes, there really is a proposed federal bailout of Fannie Mae and Freddie Mac. Unfortunately, as I'm about to show you, developments in the fixed income markets are already telegraphing that the bailout won't 'save the day' and that a substantial further decline of the Dow is almost certainly in the cards. Regrettably, we have arrived at a point in history where war of some magnitude becomes a 'management alternative' to dealing with the very real, and still growing, economic problems facing the West. To put it gently, the Country is nearly broke, we're about to become broker, and the fixed income markets are already signaling "Broken! Look out for Dow 4,280.98!" Should you be skeptical of such an assertion? You bet! So let's start with a steely-eyed assessment of the real-life Price to Earnings Ratio of the Dow Jones Industrials - something you won't find in the MSM with a microscope or fine tooth comb...for reasons that will become abundantly clear.
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Review of this week's report:
"Live on $10,000" Updated
What? You haven't ordered the ebook "How to Live on $10,000 a year -- olr less"? Suit yourself. We're all going to live it shortly, anyway. I just thought you might like a heads up by reading about how to do it before you get pink-slipped. But, suit yourself OR visit www.liveontenthousand.com. Yep - still possible. I also took a bit of additional material that was pertinent from recent issues of Peoplenomics and included them. The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the aforementioned dollar amount, but also how to migrate up the economic foodchain if you make a little more than that and do some active savings... Click here for the page with more details on it.
Thursday September 11, 2008
Then There's the 2010 Problem...
Let's just skip past the events of October, soon enough to arrive and look out a ways... Every so often, one of our colleagues sends out a note that grabs us and shakes even us up a bit, because it could go so far toward explaining events and circumstances which now, seven years after 9/11/2001 still have an air of unreality/disbelief at official answers about them.
Here's this morning's point - and it involves what's being thought by a member of Russia'
s thought leadership:
If you've been reading this site for more than a day, or two, you've no doubt figured that my take on the ultimate impact of the confluence of Peak Energy with Peak Ag and the premeditate corpgov destruction of the biosphere will not be good. And, let's not forget the founding cornerstone of things around here, namely the work I've done trying to piece together the drivers of something called Kondratiev long wave economics.
What you probably don't remember is that former Taiwanese president Chen said at the start of this year that China was also targeting 2010-2015 for the completion of its upgrades to infrastructure and its military. Coincidental? I don't think so.
Although it was published way ahead of its time, the book "Red Dragon Rising" is still worth reading. Especially when we are presently almost 'captive' to China's growing industrial production machine.
A "Perfect" Terrorist Threat
I was talking to my tax attorney on Wednesday about this and I passed on to him that one of the concerns I have is that America could be hit with a large-scale attack on its electrical power infrastructure by enemies of the Country. I mean, think about it: Not only could an attack on the grid cause a lock-up of the economy, trigger force majeure clauses for the Banksters, but it would also spur a huge resurgence of support for America's long overdue infrastructure rebuilding, not to mention shutting down the Internet - at least briefly - and thus curtailing what would be sure to be instant speculation that a false flag operation was at the heart of things. (Again?)
I then told him that on this distant outlier possibility, I had stashed a couple of November 72.5 calls in Caterpillar - not because it would result in earth-moving, but because CAT is one of the biggest plays in heavy duty back-up power systems. They moved seriously into the backup power market long before their large-scale UPS products prior to 2000.
I then went on to explain how there were certain non-U.S. companies that seemed to be buying up everything in the way of power-related companies, whether their expertise was in inverters or public power network system controls. I was wondering if that might not also be a good play. I won't mention which French company is doing exactly this and growing revenues extremely fast...
Then we got to wondering about where the money was coming from for such acquisitions and he told me the story of the precision weight measurement company up in the Toledo (OH) area that was sold to non-U.S. interests a while back. He explained that it really makes sense for Chinese money, either directly of through proxies elsewhere, to buy up U.S. companies, bleed them dry of all their manufacturing expertise and then slowly shut them down. As a bonus, along the way they get key intellectual property and whatever U.S. (and Canadian) researchers have been working on.
No, an attack on the U.S. power grid doesn't seem possible as the big life-changer which in the predictive linguistics work is coming in the opening days of October. The grid is just too darn big and there's no single intertie. Besides, who needs terrorists when a couple of chipmunks and a failed insulator can take down the whole Northeast?
Still, as a scenario planning tool, an attack (false flag or otherwise) on the power infrastructure of America because it could impair or cripple so much of life as we know it. Consider the list of things that would come with a failed grid even if for only a week:
No, it's not a pretty scenario, but thinking the unthinkable is what the goats and 30 acres have driven me to..
I asked the time monks to have a look at the concept as it relates to October, in part because we have all that leftover unfulfilled language about a 'regional power failure' which is so far unfilled. Frankly, they didn't seem to concerned about it, noting only that if you planned well for a week or two without any power, then you'd likely be well positioned for anything else that came along: earthquake, war, dirty whatevers in general.
Life without an ATM? Coffee maker? Hot shower? Even for a few days, an event of this type would spin a lot of Americans toward an attack on 'net freedom, not to mention spinning it up as "an attack traced back to (Iranian? 'Other' Middle East) hackers and that would set up...oh, you got the picture. Hand me my coffee...
Guess who's coming to dinner Saturday night?
I have to confess a bit of 'amusitude' with the local forecast which bravely says a 70% chance of precip as of press time.
The Big Story about the hurricane is that it will be coming 'dangerously close to the Houston area" and that, by-the-by also means it will take down most of the oil production in this part of the Gulf and that is like a slam-dunk for higher oil prices.
For overnight, however, oil did manage to slip under the $100-mark, falling to under $98 overnight.
I will be getting as much done as I can on the Peoplenomics.com report and possibly posting it Saturday because uploading via opur satellite system is slow - and non-op if the cloud layers are too thick.
The Balance of Trade deficit was a little higher than consensus this morning.
Remember my view of this sort of data - it's all 'rearview economics' in that this reflects the way things were in July which is pretty near over the time horizon gone that-a-way...
This will no doubt sag the US dollar a bit, and it has me to thinking that a possible short-term bottom might be in for gold and silver. Still, you're on your own here. I'm neither buying nor selling. Long term, gold and silver have more of a track record than paper with symbols and incantations etched neatly thereupon.
Headlines to Ponder
There are a bunch of them - every day. Here's a few to get you started on your own collection:
Arghhh - There Be Pirates
And we're not talking the bit torrent kind - we're talking the real deal swash buckling AK-47 armed kind off the coast of Somali. "...Pirates hijacked 11 ships with 200 sailor Bureau says..."
Back when Elaine and I were living on our sailboat, pondering a trip around the world in the wake of 9/11, one of the things that weighed heavily on my decision to pass up that adventure was a then recent case of piracy off the coast of Central America. Seems a fellow on a Hans Christian 50 was killed and the boat looted - and although there are plenty of cool sights and things to do on a sailboat trip around the world, a boatload of pirates with guns just isn't my cup of tea. No 9-11 to call out there. Just a 403 EPIRB and that's not going to get help quick enough.
It was one of those 'prep for 10-years' kind of things and then awakening to the fact that thre world had changed - even today, a trip around the world would give a wide berth to certain sections of coastline - and seems those zones are growing.
Countrywide is notifying mortgage holders of a possible security breach. Say, don't they have something like 40-million mortgage holders, or some astronomical number like that?
Say - speaking of which why is it that Senator Christopher Dodd is still being picked on for his sweetheart deal with Countrywide? Mean old press corp... Poor Sinator Dodd....
A Double Shake, Please
no, no, that's not it - this ain't no Dairy Queen - we're talking the double shake of Asia overnight with a 6.9 in Japan and a 6.6 in Indonesia - which I take it is the big quake' stuff that we were expecting before the fall equinox.
What was that Carol King song again? Oh yeah, here it is...
Sex, Drugs & Rock & Oil
Oh yeah, you did miss a party by not signing up to work for the Interior Department, it seems as headlines of "Sex, drug use, and graft alleged in U.S. Interior Department."
Who did they think they were? Congress?
Taxing Your Beliefs Department
Gee, who would believe this headline? "Report: Banks helped foreigners escape US taxes." Gee, you mean bankers would do that? Who would have thought...I'm just shocked, shocked, I tell you.
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Coping: Fine Remarks
Camden (Cam) Fine is head of the Independent Community Bankers of America and his comments about the proposed bailout of Fannie and Freddie are really worth a read because the logic is clear and it reinforces my belief that local bankers and good bankers... So good that I posting it here for you to read complete:
Like I said, seems to me local bankers are good bankers.
Impending Event Alert
Be skeptical of the predictive linguistics if you will, but please note that the Arlington Institute is setting up a system to collect dream/visions of a broad section of America as well. Almost feel change getting close, can't you?
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Wednesday September 10, 2008
Vertical Markets Ahead
There's a term that I reckon is about the change in meaning here, shortly. In sales and marketing we often use the phrase "vertical market" to describe a type of market segment. For example, within the general field of air conditioning, a tool-marketing company might think of auto air conditioning repair shops as one 'vertical market' while the commercial HVAC market would be another 'vertical'. Both use certain products that are similar yet each has its own differences.
Now the way the context could change will be for the stock market to go 'vertical' in the downward direction.
Think back a whole week to the pre-open of the Dow last Wednesday. The Industrials had closed at 11,516 and change. A week later, the Industrials closed out Tuesday at 11,231. So despite a barn-burner of a rally, the DJIA is off 285 points in the past week. No, it sure didn't feel that bad, but come on, that's exactly how you're supposed to feel: In a word confused.
My friend Robin Landry, who has a good eye for market directionals, was kind enough to call me from visiting kin folk up in Branson Missouri. "It's all going to depend on market breadth from here on out" he figured. "We may add to our short positions on rallies in here, but the breadth is the key thing to watch. Back in '87, when things began to fall apart, the volume was more than 30-t0-1 on the downside."
So, regardless of what the futures are indicating, the Big Picture that I outlined for Peoplenomics subscribers last weekend not only seems intact, but worse, likely to come to pass. Even if you don't subscribe, the general idea is that because of repricing of things in the fixed income markets, the hot money is going to lock in juicy yields there at such a rate that in order to remain even nearly competitive, the Dow could be whacked to under 5,000.
And, I'm not talking about someday/maybe. I'm thinking by the end of the year.
As Landry noted: "This is the place in the wave structure where you can have a thousand point down day." I may buy a LEAP put here and there on any strength this week. Just for fun, sport, and amusement. Cheaper than a trip to Las Vegas.
OPEC Production Cut!
Here's one that I'll claim credit for smacking squarely on the head. Did I, or did I not tell you earlier this week that we should be watching for OPEC to make some production cuts to keep the price of oil firm?
Fast-forward a couple of days and what is the headline? "OPEC to cut output by 520,000 BPD, Indonesia leaves oil body."
Need some guidance through the dynamics here? On the production cuts, my logic is, to use an old fire house saying "impeckerble": All that construction in Dubai is financed out of oil revenues, and they are not going to sell oil on the cheap to keep volume up - they've got construction bills to pay. Seems pretty darned simple, huh?
And why would Indonesia blow out of OPEC? A couple of reasons. The first of which is they need the maximum amount of dollars they can and a line of buyers because theirs is more a volume issue - employment, development, yada yada. But, they may also see that with the US and Russia getting more in a late-year showdown mode over Georgia, that any Russian supported OPEC move could keep them out of some markets and as all rabid sports fans know (like there's some other kind?) Free agent status has its time...
Speaking of Georgia, a "Georgian officer reported killed close to Russian post near South Ossetia" says one headline that would lead you to think tensions were building. But counterbalancing that is the headline "Russian troops dismantle west Georgia checkpoints."
If international relations was an adult movie, this would all be foreplay for what's ahead, I reckon.
Is Kim Jong Ill chillin' or illin'? Perhaps we should send Doc Scholes to see what's afoot. But, seriously (or at least as close as we get around here) without Kim Jong Il, where are the Iranians going to get their missile technology? Where is the US going to get an excuse to keep large forces in South Korea? How would we ever support the kind of defense industries we so very much depend on?
Best I can tell, Il's chillin ain't thrillin' for defense billin'. The world's economy is depending on him.
The Coming Iran War, Redux
The headline that "Israel’s senior ministers confer urgently on Iran as US masses air-naval might in Middle East waters" has us just as confused as ever about just which of multiple news events that could kick us into the nearly six-months long emotional release period from October 7th will be THE event.
Wonder if Kim Jong Il is making a sneak visit to Tehran under the guise of Ilness? Side bet?
The Runs: We Knew This But...
The references to "...You can put lipstick on a pig, but it's still a pig..." and "You can wrap an old fish in a piece of paper called change, and it's still going to stink after eight years..." were not specifically Palin-directed, but the McCain camp, in true rabid-right fashion is making up their own context claiming a Palin slam and off they go arguing.
From a more detached perspective, the central role of the porcine archetype comes as no surprise as I recall an old saying that most politicians are really swine, anyway. So porcine archetypes it is, then...
It's ever so refreshing to have a political campaign get right down to the business of name-calling and innuendo. With any luck, both the corpgov candidates (getting contributions within a few dollars of one another from the Banksters on the Street) will be able to keep the public attention spun up in knots over meaningless archetypes.
Why, if they can do that successfully, we won't be asking where's the real choice for this fall. We have two pro-war candidates and both will have to face a horrific economy and collapsing economic paradigm that has trapped America into spending more than it makes, and borrowing from the world for our own largess. Name calling is so much more productive, don't you think?
Behind lipstick on a politician is still a politician...
Want to see a quickie snapshot of global inflationary pressures? Check out Japan's wholesale prices - they're up 7.2% in the past year.
Although gold and silver were low yesterday, I would be surprised to see gold dip much below $750 or silver much under $11.00. I've been wrong, of course, and no, this is not advice. But, if oil prices firm, the cost of production of metals will firm as it's heavily related to energy costs.
If price curves aren't your cup of tea, consider then some of the British headlines about the cost of bailing out...oh lemme see....banks, investment outfits, mortgage agencies...car dealers next, then airlines (again?) and then...oh my head hurts - can we talk about something else for a while?
Everyone is being bailed out but the folks who write the checks....us'ns. And our "leaders-to-be" argue about lipstick remarks? Can someone pinch me?
Balance of Trade (BOT) figures are due tomorrow and then PPI on Friday but the key one to watch I think will be the Consumer Price Index number - and we'll have to wait until next Tuesday for that one. Bunch of oil inventory data out at 8:35 (Central) today.
Fixed income markets have about a 93% confidence level that the Fed's not going to do anything at their next meeting. All subject to change on a massive market spike either way, however.
Where's the Warranty Card?
OK, the headlines out of Geneva are that the Large Hadron Collider had its first successful tests overnight. At $3.8 billion, we have to wonder what the Warranty Card looks like. Gold leaf, maybe?
Meantime, the first of the potentially black-hole causing tests is not due until very close to our 'hot date' of October 7th. The coincidence of the data has not passed unnoticed by readers:
By the way,. if you thought things were a bit strange already on the subject of the LHC, you ain't seen nothing yet. Go read this morning's report over at "What Does It Mean" and you'll find the story "US Troops Commit Mass Suicide after Babylon 'Stargate' Opened..." Doubly curious: The report mentions the HalfPastHuman.com work which points to the October 7th date.
Nope, likely not. We'll just hold on until after October to get some clarity on what's ahead, however in the meantime, the news this morning out of the Mortgage Bankers Association seems encouraging...(I'll tell you the BUT - and it's a big one - in a minute...)
"OK, Ure, what's the big BUT you're talking about?"
Well, here's the thing. A whole bunch of banks are being very slow on new loan aps - or they aren't doing anything at all with them in order to see how this is all going to work out. So think about this: If a couple buying a house has to put twice as many applications out there in order to get a deal done, what will happen to the applications index? [Hint: think about it twice - or double up on your thinking].
Oh, got it? I don't know whether to rejoice that housing has bottomed, or to start reading this as the "How unwilling are banks to make new loans" index. Lemme ponder on it.
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Coping: Ad Wars
A friend of mine in Chicago is launching a new web-based advertising service which is aimed at leveling the playing field between the Big National Chains and local merchants. Here's the press release he sent me:
To my way of thinking, this is a pretty cool use of the net to put what I'd call "Big City Advertising power' in the hands of local business. He's offering a 5% discount to UrbanSurvival readers - just put in promo code KCH5 for the discount. And yes, they update their national consumer base every week or two...so it's the same data the F500's use.
EGG's for Breakfast
We'll be watching the Princeton University Noosphere project live feed this morning because of this one:
About the middle of this page, under Aesthetic View click on "the real time display" to launch a java ap that will let you listen to what's sort of the fabric of the Force that may give some indication of things ahead... and yes, they seem active today...
Hard Winter Ahead
You might want to stock up a bit heavier on wintry kinds of items. Already, we're getting reports like this one:
Fascinating? Sure, as long as it's all unfolding around us and not on us...
October 7th Bets
That would. If you're a new Peoplenomics.com subscriber, remember to read the issue from a couple of weeks back on rationing this fall/winter. Might be useful to have an eye on what may result...
My commodity broker JB report's he finished putting his motor-assist kit that I told you about on a bike he picked up... looks good to me...
This is one of those little 2-cycle jobs you can buy on eBay for about $110 (+$50 shipping) but at 150 MPG claimed, it might be a way to run around to get milk or whatever when gas rationing comes along. Meantime, lots of fun. Some states require licensing, others have motor assist bike laws that allow up to 409 CC motors with no licensing at all.
Say, I noticed that the casting on my engine doesn't have any markings at all. Must be a 400 CC or less motor, right?
Our former Houston Bureau chief, turned gold miner in Indonesia offers this idea:
If you're like me, you have friends you can trust, but who's got a hundred bucks these days?
Send snip and save items to email@example.com
Around The Ranch: (Y)Ikes
My brother-in-law, Panama Bates, will be arriving at the ranch tomorrow. His flight up from Panama seems to have been meticulously timed to put his line of travel through Hurricane Ike which is now over the Gulf of Mexico, taking a more southerly track that earlier projections. But the reservations we done long before Ike was born.
Curiously, Bates doesn't like flying. A alum of both Special Forces and Rangers (yeah, he's got the jump wings) you'd like he'd be a 'hoo-rah' kind of flyer. But, nope, doesn't seem to enjoy being bounced around in the sky. Can't blame him, flew around the edges of a couple of hurricanes back in my airline days and the edges can get lumpy.
A reader in Oklahoma sent this:
Yeah, we'll have to keep an eye on that. Maybe a wind generator wouldn't have been such a bad option after all.
Thank you for the emails of condolences on my mother's passing. Not sure if a blanket than-you is PC, but until the number of hours in a day is increased to 25 (could the LHC guys work on that, pleeeeze?) it'll have to do...
Tuesday September 9, 2008
October 7th Dart Game
Although we may get some further definition on events (linguistically) pending for about October 7th, it will likely be Saturday before we get much more definition on things (if we do then). All that seems implied by the data is that just as life 'changed' after 9/11, a much bigger change is expected in the 6-months following October 7th. In other word, the big emotional 'hit' was about 6-days and this one will approach six months. You play darts, right?
As a result, people are writing in with all kinds of guesses.
Presidential politics? Yes and No. The yes is that that 2008 contest will make the Gore/Bush 2000 Florida dispute look clean and decisive by comparison, but as far as a participatory triggering/feeding event? Not hardly; what are they going to argue about, -- How to spend our money any more wildly than present? Don't think so...Pull that dart and hand me another.
Another dart lands on a possible 'false flag' attack on the US, which would be used as an excuse by corpgov to 'spin' the country into another war, like one with Iran, for example. With almost not search effort at all, you can find websites like Benjamin Fulford's that go to this idea:
We might leave that dart on the board. Hand me another...
One of the real possibilities is that the US Dollar will reverse its recent counter-trend rally and will resume its decline, but this time accelerating wildly - so much so that we'd have to see a two-tiered currency develop. This possibility was covered a couple of years back in one of the Peoplenomics.com reports I write for subscribers. The main idea is that even though the US dollar might not buy as much oil or other goods on the global market, a new internal currency - perhaps one with some limited convertibility to a precious metal - might be useful. Of course, the problem there is that people/countries/banks that hold 'old-style' US Dollars overseas would be screwed, but then that's the whole point, isn't it?
Mind you, these countries were making the move before the citizen takeover of Fannie and Freddie. Oh, you thought it was the 'government'? Pshah! What do you have in that coffee, Citizen? When government act, it does so as our representatives as in 'We the People...'
Of course, no one has given me a good reason why greed, excess, and malinvestment should be rewarded with free money from us hard-working taxpayers. I thought that it was the Duty of Periodic Economic Recessions to run the crooks off Wall Street and out of the markets in general, but no, Corpgov is going to save their campaign contributors - and because they might be able to skate on a global financial meltdown for a few more weeks, using only the vague notion that "it was necessary" (which I'm not buying yet)...but wait! Let's not go down that path.
Let's just drink some beer and throw some darts, even if it is a little early. Obviously, thisr dart to be left in place. Another?
OK, last dart - so this one better be good - I assume you remember there's only 3-darts when you're having pizza, drinking beer, and playing darts, right? And that you play 101,301, or 501, of course.
The third and final dart (my best shot normally) lands on the "Russia and US go to a limited war over Georgia" and that this conflict lasts for 6-months. Around the 20th to 25th, we run into a treaty barrier where ships in the Black Sea are supposed to exit. However, almost certainly, the West will argue that these are really capital 'ships' - as in military - and that they are really humanitarian and therefore exempt from treaty.
I think Russia sees this gambit coming and is already starting to box the West in. "Russia says EU to vouch that Georgia won't use force" says one headline. Implying that if they do, the gloves come off.
Russia has strengthen its support of Iran say reports out of the Middle East, and you saw of course that Russia has cozied up to Venezuela, which means the US might not easily go in and proclaim and "emergency" and seize that independent country's oil assets which we'd likely be inclined to do, right after the West destroys (Russian-built) nuclear facilities at Bushehr and elsewhere in Iran, that would trigger an immediate oil embargo. Which is how we get to rationing and a black market (next story, just hang on) just in time for the worst Christmas in history.
Not exactly reassuring is the headline "U.S. rules out unilateral steps against Russia". I think that's weaselese for we're gonna bring 3 Canadians, a Brit, and 3 Iraqis with us... Yeah, that'd be a coalition, right?
I think this is my 'dart of choice' for this morning. Now, while I go nuke a couple of slices of pizza for breakfast (no beer, though - too early and too much to do) you can throw three.
One of your darts might go to "Ooops.. engineered flu is loose". Another might be "Big Earthquake of the year #2 which leaves a large region isolated - linguistically that may be in the cards before September 21 though. And let's see...third dart...Hmmm... How about bank runs and sudden attack globally on the dollar which leads to bank runs and a sudden shutdown on America's lifeblood - the ATM system?
Decent throws, all of them We'll find out which one 'doubles out' in less than a month.
eBay - The New Black Market?
While my commodity broker JB has been using copper as his silent indicator of what's really going on in the world, another reader has come up with a little different notion. Check this out:
Because the predictive linguistics have 'rationing' in the cards for the US in general before the year is out, I'm scratching my head wondering if that means the government will start patrolling eBay, sooner or later?
I can just see it now: The Corpgov Department of Internet Bidding could require a secure form be filled out first before entering anything for sale to be posted. Where did you buy the goods? How much did you pay? What's your SSN? What is the serial number of the item(s)? Got a receipt? What's the name of your first-born male son? Do you haff relatiffs in dee olt country?
And, they could make the sale of rationing coupons (gas, oil, food, and perhaps medicines) illegal with penalties like jail time for disobedience. Bet me?
Either that, or they'd just shut down the whole operation, in which case shareholders would be screwed, but I've been telling you for how long that any paper asset has a big "IF" attached to it?
As long as the power is on, the internet is up and relatively free, and eBay has great management, it's a sound investment. But, bring along regional power outages, or if the internet were to become dicey over the next six months, or if Corpgov gets a wild hair up its (fill in the blank) then the value could drop precipitously - not unlike Fannie and Freddie shares which are little more than canaries in a great big big coal mine here.
Remember, Fannie Mae went from $68.60 down to $0.73 in the past 52-weeks. Think how much money you could have made with a single long-expiration put option on this one. Don't let me rain on this here parade. I'll just take a shot of cynic juice while the MSM refers to "the superbly crafter rescue plan" of Freddie and Fannie on it's op-ed pages. Make that a double.
Soon enough, anything of interest to corpgov that's losing money will be prime for a government bailout - auto companies are already making noise - expect airlines to follow when fuel gets too high, and the list goes on and on.
Why just think how proud Marx would be: "Cannibal Capitalism Buys Its Way Into Socialism" - the movie. How quaint.
And not a shot is fired in Communist Revolution 2.0. Even better? No change of Party Bosses. Marvelous; frigging marvelous: Wake up Engels and tell him the news. 1917 was just a dry run!
Russia's gone Capitalist/Organized Crime and we're going Socialist/Organized Lobbyists. Is the Cold War over? Of course! We lost!
Speaking of online giants, which we were a minute ago (before I took a right turn, so to speak), did you happen to notice that the Google-Yahoo lashup over online advertising may be under the corpgov microscope?
I'm just so thrilled that the Just-Us Department is looking at Google. It will keep them from looking at illegal naked short selling, manipulation of the commodities markets, and other fundament infringement of free-market rules. Yeah, fine little bait and switcheroo. You go guys.
So what's the back story here? Gee, lemme think: Do you suppose that because Google has not wanted to become an enforcement arm for the Prying Eyes Departments (a/k/a the alphabet agencies) that they've stepped on the tail of The Beast which will threaten to eat Google's wallet if they don't get with the (gov't) program?
Ah...here we go: "Google cuts time search data held to nine months" is the headline. You do know that when you go looking for something online, the Feds want that info, right?
Of course, I'm just a lone nutjob off in the Piney Woods and such 'tit for tax' would never occur in the real world here in the Land of the Brave, yada, yada, yada....
Consumer Debt Report
If you hear a lot of whooping and hollering from the hills east of L.A. today, it mightbe my deflationist pal Jas Jain proclaiming victory over his "The Deflation Monster is going to Swallow Earth" outlook.
OK, he might be right.
Depending on how much money the Fed can print to save the "x', 'y', and 'z' industries which have outstripped ongoing product demand.
The truth of things is hidden in the little-talked-about Consumer Debt report - the G.19 series from the Fed. Basically, while revolving credit has been going up at a nominal 4.8% rate, which means those 35% area card rates charged by the Credit bandits are keeping just ahead of the charge-off's - but don't worry, they'll 1099 you on anything forgiven, the nonrevolving annualized debt rate for July was 0.5%.
What this means (and why Jas in my 'Prognosticator of the Day') is that overall the increase in debt enslavement is going up slower than the rate of money-printing.
Let me show you what I mean: In the G.19 report, debt is up 2.1%. In the latest H.6 Money Stocks report, note that the annualized most recent 52-weeks shows an annualized rate of increase in M1 of 1.8% while the broader M2 is up 6.0%.
If you're a cash-eyeing player, you'd say increase in debt is more than M1, so while the economy may suck, it hasn't been completely flushed yet.
On the other hand, if you're a debt hawk, you'll not that M2 was up 6.0% yet consumer debt is going up at a mere 2.1% annualized.
So who's right? I think the answer is somewhere in-between. Nonessential goods are coming down (have you seen the drop in quad core computers and mass storage lately? I figure it's only a matter of weeks at this rate before Howard Schultz figures out he can give away half terabyte USB drives with every five Grande's sold at Starbucks...) while essentials like canned beans and toilet paper are going through the roof. (No jokes about toilet paper on the roof, please.)
My best guess is that the rest of that M2 has something to do with the Great De-Levering of financial inscrewments, because short of the Large Hadron Collider, that's the biggest black hole in the galaxy at the moment. Speaking of which...
Most of the MSM and a fair amount of press on the internet has settled in on the idea that the soon-come firing of the Large Hadron Collider in Europe (incidentally, in early October for the first big smashing stuff) is really safe and no worries.
Occasionally, you'll see a headline like today's "Tech Nightmare - proton beam to destroy Earth! (Well, it could happen)."
I have to admit, I'm not too worried about the short-term impacts of the LHC. What I am worried about is the long-term impacts.
As best I can figure, the Planet Earth went on an intergalactic/interdimensional terrorist watch list when we started setting off nuclear weapons in the 1940's. You'll recall that the Kenneth Arnold sighting of the first patrol of UFO's was just two years later in 1947, right?
Since then, for the most part, the 'others' have been content to watch, pull a few strings here and there, and let us reverse engineer the UFO that crashed as Roswell and if you believe Phillip Corso's book, "The Day After Roswell" that's where a lot of 'modern' technology came from via this, that, and the other channels. No, the President of the US does not have a clearance to everything in government - there are something like a dozen levels above President in that world, but I digress.
Here's my thought: Suppose, if you will, that the first A-bombs were like a 'beacon' which attracted the attention of "Others". Now, suppose that there's some unintended larger beacon effect that might span great reaches of the quantum foam, or interdimensional hyperspatial geometries that we just have no clue about, being essentially 'smart ants' and all.
If we look at how long it took the "Others" to arrive in time for Ken Arnold's UFO sighting, it was just a little under two years.
If, as I postulate, the full-up test of the LHC is an order of magnitude higher powered 'beacon', then we might just supposicate (my word of the day) that aliens should show up in the summer of 2010 to do a little thinning of the crop because these ants are more like fire ants and can't be trusted.
And guess what's out there in the HPH data? (If you want to subscribe to their stuff, click here...the first part of the latest data run which goes out to July 2009 with fair granularity is due out this weekend, but we do get trade hits out much further and it sets us back to watching old Twilight Zone episodes.)
Fortunately, the PowersThatBe, who may have had meeting with visitors/ "Others"/ NotFromHeres as part of the July 12 1952 mass UFO Sighting that's pretty well kept out of the public's memory, we have not been allowed to develop as an enlightened society.
Instead, the deal seems to have been cut that will let the PowersThatBe hang on to the reigns of power, keep humans from going down too high a tech road, use oil and drugs to keep the bulk of humans subjugated, and oh yeah, just don't go getting uppity with the interdimensional stuff. No folding time, or wormholes. Just play the games and we'll watch.
Odds seem pretty high to me that a good chunk of the global population will have been thinned by our own deeds by then, all part of the plan, I'm sure.
Still, once the LHC starts to firing, I'll just put an X on the calendar and push out two years. That day, I'll be looking up. The trick will be lasting long enough to get there. I suspect we won't have done enough thinning (the PTB on the Power over others path need adherents, right?) so when they show up, they may be ready to 'help things along'. I'm just saying....
Ain't Wars Great? Department
Do you have any idea how screwed we'd be if we didn't have all these wars going on to prop up the economy?
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Coping: Seasons Change, II
A very perceptive reader sent an email in response to yesterday's "Around the Ranch" section:
Ah...curious stuff language - it reveals so much, yet keeps so much secret. It's one of the frustrations about knowing the folks with a 'time machine' of sorts - we can see the future coming, but while it can catch a glint off some future headline, it's never enough to give us sufficient advance knowledge to really be actionable. Like the May pre-China quake prediction: If someone tells you "Hey! There's an earthquake due and it's gonna be a big mother!" What do you do? Brace the water heater?
Frankly, I'll admit there's been a bit more to my darkish mood than just the events due along the timeline in late September that will lead to October 7th and a crashing Fall into Winter.
My 92-year old mother passed away late Sunday night/early Monday after a long bout of declining health. She was blessed in many ways that few can look forward to, anymore. Among these: A long and faithful marriage, good health till the eyes started to go over the past 4-years, and three kids that she was very proud of. (Each of us has a Masters in our chose field so she hit three-for-three there and between us, not even so much as a parking ticket in the past 30-years. )
Pappy, who beat her to Life's finish line by a few years also lived in a way that was hard to beat - being in one job for nearly 30-years as a fire fighter, shunning promotions in order to be a Captain on the working end of a 2½" hose and first in at a house fire.
When we kids were growing up, Mom didn't start working till I was in Junior High (try that with today's financial pressures) and even then my Danish grandmother who lived with us made sure we toed the line: rooms picked up, schoolwork done, dishes done immediately after meals, and the house always spotlessly clean. And boy, between Mom and and the Danish Grandma, can we ever cook!
I could go on about what a treasure strong family values are, especially the quest for knowledge which has always been a cornerstone of the values; to such a point Pappy was often called "The Encyclopedia" by friends and us kids.
A fine couple they were - not rich in dollars perhaps, but in the things you can take when you 'cross over', they were loaded. A year-long tour of just about every sight seeing vantage point and attraction worth seeing in America, living a couple of years in Hilo on the Big Island, and frequent trips to Mazatlan. Memories & karma (that do unto others stuff) are the currency of What's Next, near as I can tell. At least you can take those with you.
Their departure, like the pending end of a period of relative calm in the financial markets, does indeed mark a major 'change of seasons' for me. While it's true that 'none of us gets out of Life alive', it's also axiomatic than we rage against it to the end anyway. Programming, I suppose.
So, gone are the days when Pappy used to say "Put my tools back!" and Mom scolding "Sit up straight." A sincere thank you is due to both for passing on the Rules of a Good Life.
The time monks sent along a comforting reminder: "Universe says it knows what it is doing."
I hope that's true and that Its wisdom extends through this Fall.
You figure if you're on enough radio interview shows, over time, someone will do something with the words - and will try to find more meaning that what the words are. But, I get ahead of myself (thanks to the medium roast). Here's the email that got me started:
Sooo...if you like the study of predictive finance and you're tired of 'backwardization' in commodities (or fixed incomes) go ahead and click here....maybe the future does make more sense backwards.
Send snip and save items to firstname.lastname@example.org
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Around the Ranch: An M-16 Story
The neighbor up the hill needed a socket to get his finish mower blades off and his dad happened to be on hand and we got to talking about guns.
It hadn't started that way, of course, but this being Texas and all, a conversation about wild hogs leads naturally to the other thing in 'ranch protection' department.
So the story I heard (after hearing the virtues of ultra high velocity 17-caliber guns extolled) was that the reason M-16's were not as reliable as the AK-47's was that the standard issue military load was a few grains (of powder) light. The story continued that because whoever had the military ammo contract was trying to scrimp on the load (to save money over the life of the supply contract) the ever-so-slightly underpowered load prevented the M-16 from properly cycling unless the action was meticulously clean and properly oiled and adjusted. Different than the kick it in the mud and pick it up and fire AK-47.
Well, I have to tell you, that's one I had not heard before. I've made a note to ask around about this story and thought I would start here. I thought it was a design/fit/tolerance issue, not a matter of the powder load. But, then again, I'm not gunnery type.
For most things, I find a lawyer works better than a gun. However, now that we may have 15-20 wild hogs munching their way over the mountain toward our place, the largest of which looks to be over 300 pounds. I'm asking myself "What's more dangerous than a lawyer?" I'm not sure even now if a gun is, or not. Wonder if a lawyer could talk a hog to death?
Monday, September 8, 2008
Bailout: It's Only Money
Well, your money, then. OK, and my money. But, even as the Administration puts aside any remaining pretense of supporting free-markets, there's a dawning sense that we have taken yet another step closer to a Soviet-style government. No, the government won't directly tell you where to live, but, we are getting a step in that direction with the bail-out of Freddie and Fannie.
As I explained to Peoplenomics subscribers this weekend, the takeover will no doubt remove even more home financing from the marketplace. And, as a marketer/sales consultant by trade, it simply means there will be fewer ways for customers to fund their purchase. Which, opening up the Marketing 101 book, says there will be more downward pressure on housing sales as a result. Just what we need.
The Dow and other averages should have a screaming barn-burner of a rally today. Already, the fire's been lit in Europe where markets are up in several cases more than 3%. I'm left wondering if the London tock Market's troubles today ('computer glitch') had something to do with the size of the rally there.
Is this really good news? In the very short term, yes. But keep in mind that combined, Fannie and Freddie made up less than half of the housing funding out there. What happens in the wake, I think, is that there will be additional pressure on the other 53% of the market that doesn't have Hank and Ben in the back room printing up money to shore up the House.
My well-informed friend who managers a lot of money for a living in the fixed income markets (ten places left of the decimal is big to me) worries that a further 20% downside could remain in the housing wring-out.
I'm hoping he's wrong, but his book about how the meltdown appeared has proven remarkably prescient so far - and if he's right, the higher returns in the fixed income markets may suck some of the air out of the stock market where companies are reporting 'sales increases' that really aren't increases at all, when the inflation adjustments year-on-year are cranked in.
But don't let me rain on the party. Fasten your seat belts and return your tray table to its upright and locked position. The market is about to take off. It may be a short flight, however, and a lot of turbulence is expected. Not just the kind of 'life-changer' stuff that I expect will pop out of the headlines in 29-days or so based on the HPH predictive linguistics. But because so many other things are in play...like this one:
What did I tell you in last week's column? Hmmm? I said
So here we are a week later and (tah-dah) "OPEC considers cutting oil production". Gee whiz, gosh, golly, darn-it, ain't that a surprise?
A report out of the UK claims that "Terror groups developing 'dirty bomb' say security chiefs". Not the kind of thing to read with a 'hot date' just 29-days off.
'Them Winds" - Again.
Hurricane Ike smashed into the Turks and Caicos Islands this weekend and is now working its way toward the Florida Keys, by the tracking maps. In fact, Ike looks like its about to come up this way again, with another landfall looking like it will be West of New Orleans and East of Houston. This weekend, for the Gulf states landfall, I'd reckon.
Pick a war - any war. None of them seem to be going too well for US foreign policy types, but then again, is that surprising? The issue is that of late, we seem more interested in promoting a paradigm (corpgov's mass consumption and constant growth model, at the expensive of sustainability, but that's a two-beer discussion). So let's just stick with the highlights:
In Georgia, Russians turn back UN convoy inside Georgia.
In Afghanistan, a key border crossing with Pakistan that was closed this weekend has been reopened, BUT this morning there's also a report of a suspected US missile killing 9 people at a Taliban center. Don't expect US-Pakistan relations to be enhanced by this latest, and look to the Pakistan Border region as being particularly contentious.
The command of General David Petraeus in Iraq comes to an end next Tuesday. The surge is done surging...although levels of fighting are down to 2004 levels. Out of the UK comes a "Mental health 'timebomb' warning" and it's very critical of healthcare for those who served.
Iraq, by the by, has also just signed a preliminary gas deal with Shell, but of course the war was not about energy resources. If you're wondering why we had to take out Saddam Hussein and yet we're not going in to save Zimbabwe from Robert Mugabe's government, you'll just have to make up something creative. If it's a real whopper, I'm sure you could write a book for the Rabid Right Press.
The Week Ahead
I have no idea why it takes so long for ETrade to get money from my bank (which took money from my checking account on Sept. 3) into my trading account (where I can't use it until Sep. 10). But, that's fine. I figure most of this week should be a 'denial rally' and we should see a nearly 300-point up day from the Great Bailout.
Me? I will maybe scale into a small short position and just await early October developments. Let me see: October 7 or so for the 'hot date' (which may be a series of events, not a single big headline grabber. And options expiration in October is the 16th (indexes) and 17th (equities) if I can read the calendar right. Yeah, might be worthy of a small speculation.
The Fed is due out with Consumer Debt today - which from their side of the ledger looks like Consumer Credit. But you don't get 'credits' in the mail, do you? Nope, the bankers always look at things from their point of view.
Producer Prices comes in on Thursday, but no hurry to get there - as it may show persistent inflation of prices at the producer level..
All in all, the linguistics pointing to a period of relative calm until the 22nd of the month or so, then with a building prequel around the 27th or somewhere in there, may hold. And, if it does as expected, that would be a dandy set up for the October index puts to simmer down in price a bit. I'm not all about making money but if the Universe is going to present opportunity to take a little back from the PTB, who am I to miss the party?
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Coping: Security Mindedness
There's a big section in Dmitry Orlov's book "Reinventing Collapse", that deals with how everyday people during the collapse of the Soviet empire, found themselves engaged in a whole lot more thinking about personal security than they ever had in the last. The idea went to the notion that if you had anything of value, you would need people to help you keep it. And, if you didn't have something, you could sell your service - like in a protection racket - not to take it.
I mention that because as we head into future events, there's a whole lot of development that has been going on in the field of 'security' in general and a headline like "Bulletproof designs add style to growing Mexico security industry" begs for comment. I mean beyond the obvious: "Designer and Kevlar being used in the same sentence, who would have thought?
My client who sent me a super light styrofoam Super Cub, which I'm in the process of turning into an electric powered UAV to keep an eye on the perimeter here at the ranch, probably missed this headline, but an article in "Defence News" talks about a UAV that was flying for 3 1/2 days over Arizona in July. an d the idea of 5-year UAV's is making the rounds among that brand of systems engineer.
You might have caught last week that Israel's Elbit Systems picked up a $25-million UAV contract for its Hermes 450 systems. Our own little project will likely come in at around $350, which would be the basic platform from Hobby Zone, a small lightweight wireless camera which you can find on eBay for about $40 or less, plus upgrades to the radio to extend range (no hints here, like a directional receiver antenna for the video and a higher powered control link, not to mention a few other goodies like a higher power electric more for more lift, and faster response servos.
When done, we ought to be able to have 10-minutes of duration - time for a perimeter and area check, and a real-life flight simulator.
Sour Dough Time
Don't think the time monks would mind me sharing their latest communiqué with you:
My own taste in "revolutions" goes to the kind that twist caps off beer, or another adult beverage.
Better to pull a lever than a trigger. Besides, corporations haven't figured out a way to hijack the precinct committee level - yet.
Send snip and save what-have-you's to email@example.com
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Around The Ranch: The List
Summer is passing quickly here at the ranch. Linguistically we're down to about 4-weeks until whatever it is that changes life again - and of a greater degree than the 'terrorism' of 9/11 and the subsequent wars and WOT did following.
Although we don't have much clarity on the specific 'what', we know that there's a hot 'time' on the calendar which could be off by a day or two, just as we had some 'time drift' around the predictive call for the major quake in China earlier this year.
Summer, meantime, is quickly passing, and one of my favorite times of the year is almost upon us. Those two times are the period when neither heating, nor air conditioning is used. Yes, we could get through the winter on a cobbled up wood-fired heating system if necessary, and yes, we could likely make it through summer without A/C, but comforts are nice, no two ways about it.
I started the weekend with a huge list of things on the to-do list and sadly, I can report that like all well-intended lists, painfully little got done on schedule. The new cabinetry in the kitchen was completed, and the framing in of a window got done. So did the kick-butt Peoplenomics report, if I do say so myself.. But much remains with just 4-weeks until 'whatever'.
It's also the time of year when we start looking at the feed situation for the animals. I'll be picking up a fair amount of hay this week. Preparing for humans is a fairly simple thing, in comparison, as they can forage over fair distances and are creative. Goats? Have to keep an eye on them. And, just like regular humans should have some number of months of medicines and such, so too, goats need to have water, meds, and what have you.
Over the next week, besides time to send in quarterly IRS payments, the 'must get done list' includes things like a few moire parts for the well, a lot of wood, and like some scrap steel; and maybe a small wood stove. Not that it will all be done, but if the post October 6-8 events are as dramatic as they seem to be based on the time monk's outputs, there will be plenty of time to get real work done as life goes through a large change of form.
Even if it doesn't, there's still a lot to be said for having all the supplies we might need for 'x' number of projects on hand ahead of time. Projects are strange little critters - they require the right 'mood' to be done in the best possible way.
Some days I face the shop and have absolutely no interest in doing anything at all - just get me back to the computer and let me focus on that because it's what I like doing at that moment. Other days, you'd need a taser and a can of mace to keep me out of the shop - so much to do, and so many ways to do it - each fun, or at least rewarding, in its own way.
Monday's are a bit like that, too. Some Mondays the events of the weekend linger until well past lunchtime. Other Mondays, the outlook is toward the next weekend. Curiously, few Mondays lend themselves well to here-and-nowness.
But times, like the seasons, are changing. So with that in mind, I will try my best to stay focused only on the day at hand and remain in the 'now' as much as possible. The clock seems to be running toward something and the comfort of a Fannie/Freddie bailout seems unlikely to be more than a set of headlines compared with events and changes over fall.
In the meantime, I keep dancing with my list. Three projects come off, two, three, or six more take its place. Like the broom in the Sorcerer's Apprentice (either the poem (Der Zauberlehrling) or the Disney movie Fantasia), my list seems to have taken on a life of its own.
In the clear morning air of rural East Texas, I resolved to work harder than ever this week because of the urgency of what's to come.
That, and I'm buying a big eraser.
Before the chart, a little background:
Once upon a time, a long while ago, I observed during my quest for 'truth' in economics, that the PowersThatBe, the talking heads on the teeve, and the other information sources that actively engage in the programming of humans not to think, had conveniently swept several trillions of dollars that disappeared in the Internet Bubble's bursting (since spring 2000) under the rug. Surely, it wasn't unnoticed by the thousands of people who called brokers and said "Where is my money?" "Gone, but hang in there as you're a long term investor!" was about all they heard back.
But, the truth of the matter is that this chart shows what your account would look like if you have taken a few thousand dollars and invested equal amounts in the Dow, the S&P 500, and the NASDAQ Composite in the waning days of 1999. It's not a very pretty picture, and it sort of gives away the other side of the story. You know, the one that no one has an interest in telling, because it's a truth which shows the amazing coincidence of the timing of 9/11, the disappearance of naked shorting evidence and all, along with the impact of The Wars which have managed to keep the economy out of an earlier depression than the one expected by me by late 2008.
No, it's not a perfect replay of 1929, but history doesn't repeat exactly, it only rhymes. So think of this as the rhymes and the crimes chart:
Write when you get rich,
George Ure, The People's Economist
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