---

Published Monday through Friday about 8 AM Central Time Except Holidays

 

This site is supported by subscription to Peoplenomics.  For additional content, please subscribe.

 

Bank Bailout Breakdown?

Barney Frank says it's a battle between factions of the GOP that's keeping a bailout deal from being struck.  

 

The headlines from places other than US MSM are that the proposed "US bank bail-out breaks down", "Wild Day, No Deal",  and even domestically, "Obama, McCain say no deal yet on financial -markets rescue plan".  But Wait!  Notice that phrase?  Follow along here...

 

CorpGov/MSM Spin

I was shocked this morning at how the linguistic spin is being ratcheted up by the corpgov/MSM  It's as though the major (under-the-corporatist's thumb) media have almost universally started referring to the "bail-out" as the "financial rescue plan".  The more accurate, but emotionally hotter term "bailout" is being banished by the bankster's buddies & buffoons.

 

IF you ever had any question as to whether you were watching a news operation that would give a balanced and fair assessment of things, all you need to do is notice whether they call this a 'rescue plan' or a 'bail out'.  If they are not using the term "bailout", I reckon they have been 'sold' the idea that Americans need to be led by the the folks who have hijacked the Constitution.

 

If the Constitutional humans that are supposed to be in direct control of America (as opposed to the 'corporate entities' NGO's, lobbyists, and other corporate minions,) ever actually kick/vote/or maneuver the money-changers out of the temple democracy, remember who was spinning you to support a hurry-up high dollar "rescue plan", eh?

 

We'll just watch Google's news search engine.  This morning, "bailout" has 129,656 hits (you can check it yourself, as results may vary by which Google server you hit possibly, while "rescue plan"  had 34,174 hits.  That's a total of 163,830 'hits'.    My back-of-the-envelope theory suggests the Google News Search engine can be used as a "truth detector" for some things.

 

Now that we've made a note of it, let's see how things score along toward the end of next week.

20.8954% of referencing is to "rescue plan" presently.  Corpgov 'spin doctors' being what they are, I wouldn't be surprised to see something like 25% to 30% given a week for them to gear up their campaign, apparently thinking that people will remain almost universally unaware that it's how imagery is 'sold' into your head at a preconscious/unchallenged level that the MSM controls your beliefs down at a level you're not aware of.

 

Unless you hang out around here, of course.

 

Shotgun Marriage Department: WAMU This Time

Uncle Sam has brokered a deal for JP Morgan to buy assets of Washington Mutual.  WAMU has been at the financial wall for weeks - and the cool thing about this is that it prevents WAMU from drawing down the funds out of FDIC if I'm following the plan correctly.  FDIC may need a $150 billion bailout itself. 

 

Limited Freedoms Department

Information/Freedom advocates "...Demand Congress put bailout details on Internet" but you know that bank- room deals just don't work that way.  Still, daylight democracy sure sounds like it would be compatible with the Constitution we used to enjoy in America back when it was unimpeded by Executive Orders/ Executive Limitations...

---

"No to all incumbents" - that's the ticket I'm voting this year.  Figure a bunch of greenhorns couldn't be much worse than what we've got now...

 

Ford, Dylan and AAFCPS

The conversation with my friend The Bond Dude was more instructional than usual Thursday.  He put a lot of items on the table that are going by largely unnoticed in the mainstream financial press, mostly I suppose because the financial press doesn't manage 10 digits to the left of the decimal point for a living, and thus innumeracy runs amok as a disease among financial "reporters"..

 

"You can see quite clearly how the Big Spin is going," he began.  "For one thing, the republicans will be long gone when the actual consequences of the bailout package/mess comes home to roost on the average American household, so quite cleverly the republicans are going to 'let' the democrats call it the democratic bailout plan and from the perspective of the future, it will be republicans getting off with no harm, no foul..  Cute, huh?"

 

I had already been wondering why the democrats didn't just form up in a long solid unbreakable alliance and simply refuse to let the advocates of Wild West Capitalism/ Cannibal Finance just clear the table on their own by having the decency to just sequentially go bankrupt and leave us the hell out of their games.  Now, it was coming clear since both parties suck from the same corporate checkbooks when push comes to shove...

"You still there?"  The phone was still to my ear - I was still grinding through the sociopolitical (or was that political pathology of the crisis) intrigue.  "...uhhh...yeah...go on," I stammered.

 

"OK, next thing:  You see how the republicans are trying to drag out everyone who was a democrat who ever got near any of this, even going back to Clinton in 1999?  Well, that's part of the big lie, too.  You know why?  I'll tell you:  The whole portfolio of Fannie and Freddie turns over about every five years - so going back to even 2003 is a stretch...but most people don't know this.  It's just the ugly end of trickle-down economic theory."

 

That got me to thinking about setting up a new think tank which I've been tentatively thinking about called the "Project for a New Broke American Century" as the sequel to the first round of misguided whateverism.  "Focus George," I told myself...

 

"Here's the thing:  You remember the Tennessee Ernie Ford song 16-tons?  'You load 16-tons, what do you get?  Another day older and deeper in debt..." right? That's where we are now:  Things are so tight that the American worker can't load any more than 16-tons, yet this bailout stuff is going to push people to produce more - maybe 20-tons - and there just is nothing more to produce so whatever the deficit is will eventually have to come out of stockholders and equity - and there will be all kinds of screaming as that sets up..."

 

"So what does that mean for the Country?"

 

"Oh, Bastille Day comes to mind.  Look, we're already at the point where people are being told 'let them eat cake' by their elected "leaders" - what do you expect them to do?

 

"Bob Dylan?" I wondered - thinking back to "Like a Rolling Stone"  The lyrics, how did they go?  Something about Bob Dylan as a latter day Nostradamus writing...

"Princess on the steeple and all the pretty people

They're drinkin', thinkin' that they got it made

Exchanging all kinds of precious gifts and things But you'd better lift your diamond ring, you'd better pawn it babe

You used to be so amused At Napoleon in rags and the language that he used

Go to him now, he calls you, you can't refuse

When you got nothing, you got nothing to lose

You're invisible now, you got no secrets to conceal."

"Hey, I've gotta go..."  The Bond Dude doesn't have too much time these days -- Most of his folks are still wading into the repricing of old LEH paper, a task bound to go on for weeks to come, and as explained earlier, because there aren't enough 'third parties' to handle all the paper that an AIG or other big failure would cause, no more could be allowed.

 

"You serious about Bastille Day/French Revolution stuff?"

 

"It's happened before.  Look:  I had a math teacher once who used to write in big letters on the blackboard 'AAFCPS' - you know what that means, right?"

 

"What's that mean?"

 

"As Any Fool Can Plainly See.  I gotta go..."

 

To Our Illiterates In DC Department

Hard to get much better perspective than Thomas Jefferson's letter to Treasury Secretary Albert Gallatin in 1802:

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

But who is Washington these days is listening to wise Jeffersonian counsel? "When the government fears the people there is liberty; when the people fear the government there is tyranny."  Now THAT'S a President.  Seems to me Jefferson ddn't need waterboarding, Patriot Acts, or what amounts to a line item veto of the Constitution with Executive Orders....

---

I am so old I remember when being called a Republican was not the worst possible insult imaginable.  The second worst insult these days is being called a Democrat.  Me?  I'm more of an  American Whig Party thinker:

"In particular, the Whigs supported the supremacy of Congress over the Executive Branch and favored a program of modernization and economic protectionism. Their name was chosen to echo the American Whigs of 1776, who fought for independence, and because "Whig" was then a widely recognized label of choice for people who saw themselves as opposing autocratic rule."

Being a Libertarian is about the next best thing, but in neither case is an insult implied as in the former two.

 

Let Our Illiterates, II

In case you haven't seen it, three Nobel Prize laureates and a couple of hundred other economists have sent a petition to Capitol Hill urging CONgress to go slow and be methodical on the bail-out measures.  Wonder if anyone will take the time to read it....

 

There Goes "Our" Energy

"Venezuela to book crude oil exports to China by 25%" says a headline.  The question reduces to is whether with the Russia ship (and possibly submarine) visit to Venezuela going on, are Russia and China competing for presence in resource-rich South and Central America (China more or less owns the Panama Canal now) or are Russia and China cooperating in just the same way the NATO countries are cooperating to expand their influence east toward Russia?  An incredibly important strategic question to keep an eye on.  One driver: The birth rate of Russia plummeted during the post Soviet 1990's...
 

Iran Bombing Sought

No question about what's ahead - just a matter of when more than anything as "Israel asked US for green light to bomb nuclear sites in Iran" this past spring.  Now, with the US approving the sale of bunker-busters to Israel, I expect the answer will be different once Israel gets its government in shape .  A war with Iran might be a good 'spinner' to get American's attention off the bailout and bankster holdup now in progress. Unless you're in Iran, of course.  Then again, you-know-what happens.

---

By the way - a year or two back I mentioned my assessment that Israel had as many as 250 nuclear weapons?  Well, here's an article that says 100 to 200 may be closer.  I'll stick with my guess, though.

 

Money Saving Crime Fighters

Police in Palm Bay Florida may stop responding to certain kinds of crimes as a budget saving measure.  If the next year or two goes as I expect, this is only the far-distant leading edge of the kind of reductions in local services that will become epidemic as real estate tax revenue declines (from the housing market collapse) work their way into the system,.

 

Markets: Everyone Out of the Pool?

I look for markets to sell off a fair bit today.  Yeah, sure, the opening is pointing down on the WAMU story and the lack of a final deal on the bailout, but more important, there seems to be a fair amount of risk to holding positions over a weekend when so much could change within hours.  So, barring a breakthrough deal announcement of some kind, I'd look for speculators to hit the exits in the last hour or two of trading today.

 

--- snip and save section ---

Coping: Erin Burnet Fan Club

I have to hand it to Erin Burnett for getting the bailout nailed.  Something to the effect that it could be a 'seriously heinous interfinancial transfer'.  If you coffee hasn't kicked in yet, go back and check the first letters of each word...

 

Math Lesson 1: Email to Watch For
As long as we're talking about perceptions and such, be on the lookout for an email that goes to this idea (and it's spreading on the internet like crazy...):  If we took the bailout money and gasve it to every adult over age 18, everyone in the country would get $425,000.

 

Sounds great?  Well it may sound good, but the originator of the email - and again this thing is going bananas around the web - didn't do their match right.  $700 billion divided by 200 million.  is not $425,000 each...and it's much less appealing. 

 

The lesson?  Whenever you get one of these emails - check the math yourself.  People do make errors and then send them out all over the internet...

 

Math Lesson 2: From a Reader

This is pretty good:

Here's something I quickly put together for a friend, about the mathematics of the financial mess. You might find it useful.

 -----Original Message-----

Subject: Re: About Saturday's conversation...

 

> Goodbye taxable income base.

 

The mathematics of borrowing trillions of dollars doesn't make sense in America, especially with the Baby Boomers retiring. Under Bush, more than four trillion dollars was added to the national debt and we're paying over 400 billion dollars a year in interest alone.

 

Corporations have gotten skilled at avoiding taxes. According to the IRS, 2/3 of corporations pay no taxes, and about 1/6 of income taxes collected now comes from businesses, mostly the "mom and pop" variety of small business.

 

Let's assume that the average immigrant worker is making the federal minimum wage of $6.55 per hour. It's safe to assume that would mean less than $15,000 a year in income per immigrant worker.

 

The IRS has wage and tax data in Excel spreadsheets, and the last year they have it for is 2006.

http://www.irs.gov/pub/irs-soi/06in11si.xls

 

In 2006 the average American taxpayer paid $11,041 in income taxes, while people in the $10,000 to $15,000 group paid $411 in income taxes.

Generally, if you are working for minimum wage, you are only paying Social Security and Medicare. That's mainly due to a low tax rate, the 1040 standard deductions, earned income credits if you have kids, etc.

 

At that rate, you'd need a billion workers in that tax bracket, just to pay the interest on the existing national debt, let alone paying for anything else.

 

So, who is going to pay back the interest on all these new bailouts?

Who is going to pay off the principal on the national debt?

For the answer, run to the closest mirror...

 

Another Good Email

Try this:

"Hello George,

Funny, after staying up late and listening to the interview on Coast to Coast I know your voice and almost feel as if I'm addressing a note to a friend. Oh, and please tell your buddy Clif that he and I do share the same career aspirations at this point in life. A decent sized boat, and off into the sunset with perhaps a companionable person or two to share the happiness with... Sadly it doesn't look too likely at this point for me - but one never knows what the future will bring - and I do tend to be an optimist by nature. (Comes in handy when dealing with the current predictions of USA and Global upheaval the web bots are telling us about, I assure you!)

My question is this - I have found your site fascinating. Your take on the current state of affairs coupled with that spirit that searched for 'truth' in economics has resulted in a damned interesting and informative web site. In fact it's so good, that I'm wondering what else does one get for the additional $40/year for a subscription. If the truth is little else other than to know I am giving some small amount as a token of my thanks for all you've done to date - then buddy I'd consider it money well spent. If there's more, that is probably just something I'd regard as "bonus material" given that I believe you should be rewarded for your efforts on behalf of those of us who are not among the 'digiratti' (did I spell that correctly? The spell checker has NO Figgin' idea of how to manage that one correctly or otherwise. Perhaps I need a more 'hip' spellcheck library?)

So at the risk of being a jerk - and I really don't mean to be - what else do your subscribers get that is not already on your excellent and most clearly written site? How you manage to get up, do this and then run the ranch, I'll never know - your to do list would be daunting to a man of 25, and I assume you're somewhere beyond those tender years!! (just a bit perhaps?)

Thanks for any answer you may feel inclined to shoot off to me. Please tell your buddy Clif that being an old bald guy isn't half bad. Were it not for a hell of a lot of money dropped at the Bosley Clinic several years ago, I'd be in he same condition. As it is, I wonder what would happen had I spent the money on krugerands vs plugs? I think Gold was about 400/oz back then... and the transplants cost me about thirty-five or forty thousand over a year ...hmmm... that's depressing as hell to contemplate, so I'll move on to other things. <grin> Maybe I'll go get a haircut! <grin again>

Thanks once again. Great site. But I can't for the life of me figure out what it is that you offer your subscribers that is that much BETTER considering how GOOD it is already?

Keep up the good work, and all the best..."

Good Question.  Let me give you the background:  UrbanSurvival was launched as an outgrowth of two things: Wanting to help build a broader awareness of economic issues for an audience that was reading the old Long Wave Economics forum hosted years back by the Center for a Sustainable Future at the University of Colorado and my needing a capstone project for my MBA.

 

So one thing led to another and the costs of the bandwidth caught up so I decided to publish (starting in October 2001) a slightly longer form report on weekends which I call 'Peoplenomics."  That site includes presently about 300 past issues that cover soup to nuts.  The ebook "How to Live on $10,000 a year - or less" is there.  There are perhaps 6 or 7 chapters of "13 Acres and Independence" which recounts the adventures and learning that go with modern homesteading/back to rural.  And the list goes on and on.  Most weekends, the Peoplenomics report runs 6-7 pages and then there are three charts which I also update for subscribers (one of which is at the bottom of this page).

 

The idea is that the week day reports are about the same length as the Peoplenomics report, except that Peoplenomics reports are single topic/tightly related content, whereas on most mornings I never know what's going to come out.

 

Like this weekend, for example, I'm working on a 'master survival goods' list that will get into items that would be more useful than they are today when the power is on and life is "normal".  Example: A manual grain mill and some stored wheat sounds useless right now, but couple that with a Sun Oven and then you at least won't starve right away.  So we're looking at degrees of lifestyle breakdown/change that could come with any combination of terrorist attacks, or breakdowns of infrastructure that we so much take for granted.

 

Not necessarily "how to be chipper and cheerful" stuff, to be sure.  But we like to run to problems rather than away from them. 

 

Don't mean to turn this into a 'sign up now' pitch (that's here if you want it) but you raise a really good question.

 

Now, the comment about "How you do it?" That's pretty simple really.  It's all about figuring out how to be a 'high output human'.  I could go into more on that, but time doesn't permit, except to say that whenever I do something, I try to take a half-step back and figure out the best/fastest way to do something.  So, if I need a piece of software to get something done, I don't fret over it.  I get whatever tools I need to get through a task quickly and efficiently.  Cliff's Vortex Reader when I need it, lets me read at 800-1,000 worlds per minute on big documents, for example.  Yes, I have DragonSpeaking 9, but I also type at 90 WPM plus (with a few errors here and there ;-)) and since I was a big city news director for years, I don't need to pencil out an outline of what I'm going to write - the stuff just flows out of my fingers.

 

The typical morning report on the free side only takes from 5:30 to 8:00 AM including the RSS feed.  Thankfully, lots of readers send in news tips, and while I usually don't send individual 'thank you's" they are helpful in getting a sense of what's on people's minds.  And,; of course, there's the guidance of where the future is going based on Cliff's work...so we tend to be ahead of events more than a conventional (e.g. event-following as opposed to event-leading) site might be.

 

Same thing in client work: I'm a great fan of using 'power tools' to get the job done right: online accounting, chat, auto-dialing numbers, and even the process of signing up for the Peoplenomics reports is highly automated to the point where it could handle several thousand subscriptions per day (I should be so lucky, LOL) in about 15 minutes of effort.  Until I hit a download limit, the ordering and delivery of the eBooks is all managed by www.payloadz.com.  Even after that is hit, the process is only another 15-0minutes or so.

 

Online banking and downloads keeps my accounting overhead very low, but again, I am not afraid to buy the tools I need like QuickBook Pro so I can see my financials by class (the ranch, the web site, the consulting, and misc) at a glance.  And because that in turn feeds the tax software, all that is fairly well automated.

 

Take out television watching, change the oil on the riding mower and the tractor regularly, and when it's time to lay out some large personal capital expenditure, make the decision intelligently, but don't fret over it.  To me, buying a $2,000 refrigerator/freezer is about a 15-minute decision.  I might spend a half hour on something like a car.  But a $200 piece of software to keep my efficiency ultra high?  Don't even think about it - just hit the Amazon account and "Is it here yet?"

 

Throw in things like eating well and trying to get at least 7 hours of sleep per night, and being selective about what books I read, it's not all that tough to be a fairly high efficiency person - as long as the lights are on. 

 

When all that changes, well, that's the topic for subscribers this weekend.

 

Just like Peter Drucker had "Management By Objective", I try to live something akin to "Life By Objective" - and I suppose there'd be a book in that topic alone.  But, time is too short for that - besides LBO has some very negative financial connotations...

 

Oops, this is starting to read like a Peoplenomics report....

---

Send snip and save items to george@ure.net

--- end snip and save section ---

 

Please Share

If you enjoy the content here on UrbanSurvival (or from the mirror site www.independencejournal.com)  please bookmark it for yourself and share it with others by clicking below:

 

Peoplenomics.com 

Getting the Gini into the Bottle & Other Matters

This week's report will be covering a tremendous amount of ground - starting with a lay person's perspective of the Gini Coefficient which defines concentration of wealth, why payroll taxes are soaring and how the Republicorps has managed to spread its tax lies (hint: off balance sheet spending of $400/billion per year), which bank failed most recent, and which one we have our money on for the coming week.  Going too fast here?  Then we will explain how the truly rich avoid paying payroll taxes (it's really cute!) and then we'll roll out a workable solution to keeping the public from getting screwed in the evolving financial tsunami and last but not least, a word about why making sure your home is 'homesteaded' is so important.  I recommend a stiff drink and an iron constitution before reading further.  If this week's events haven't yet driven you to drink, wait till next month. I expect to make a little room for the Gini...and wait till you see our "Buy and AK-47 or solar panel?" poll results.  Oh - and some notes on how "time" works.  Yeah, that's more than enough to keep us busy in this week's report...no other honest reckoning of things is in sight yet.

 

          More For Subscribers         Subscription Information

.

Not a Subscriber yet?  It's just $40/Year:  (Allow 48-hours for processing)

 

Review of this week's report:

"Dear George, Inspired by today's bulletin, I looked at the business section of the NY Times, and read on page 6 Why the Bear Is Alive and Well. The writer, Paul J. Lim, talked about P/E ratios, and I felt very smug, having been made hip to them by your writing. The reporter seems to confirm what you've been saying, which shouldn't come in as a surprise. It's just interesting to see something about what I just read from you."

     (Other Payment. Options)

"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.

----

Last week's report is here.    For back issues of this site, click here.  (Goes back to 1997!)

 

---

Thursday September 25, 2008

Special Update

Housing Horror: Sales of 34.5% YoY

Newest figures out from the Census Bureau on housing sales and prices came out this mroning - and they are very bad:

Sales of new one-family houses in August 2008 were at a seasonally adjusted annual rate of 460,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.5 percent (±11.7%)* below the revised July rate of 520,000 and is 34.5 percent (±7.3%) below the August 2007 estimate of 702,000.

 

The median sales price of new houses sold in August 2008 was $221,900; the average sales price was $263,900. The seasonally adjusted estimate of new houses for sale at the end of August was 408,000. This represents a supply of 10.9 months at the current sales rate.

It gets worse when you drill down into the numbers.  The average sale price in August of last year was $313,600 in the report.  That's down 15.8%.  The median price decline was less (about 6.2%) so no doubt the happy-talk media will focus on that one.

 

The real number to watch?  Home sales were 460,000 in August of this year, versus  702,000 in August of last year.  So sales are down 34.5%!

 

Durable Goods Collapsing

While there's talk that the Big Bailout Deal is close, what this country doesn't need right now is another economic problem, but here's a very, very big one: The new durable goods orders out this morning show orders for big ticket items collapsing:

"New Orders New orders for manufactured durable goods in August decreased $9.9 billion or 4.5 percent to $208.5 billion, the U.S. Census Bureau announced today. This was the largest percent decrease in new orders since January 2008 and followed three consecutive monthly increases including a 0.8 percent July increase. Excluding transportation, new orders decreased 3.0 percent. Excluding defense, new orders decreased 5.0 percent.

Shipments Shipments of manufactured durable goods in August, down following two consecutive monthly increases, decreased $7.7 billion or 3.5 percent to $210.1 billion. This was the largest percent decrease in shipments since December 2002 and followed a 2.3 percent July increase.

Unfilled Orders Unfilled orders for manufactured durable goods in August, up thirty of the last thirty-one months, increased $3.0 billion or 0.4 percent to $827.2 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.8 percent July increase.

Inventories

Inventories of manufactured durable goods in August, up thirteen of the last fourteen months, increased $2.4 billion or 0.7 percent to $338.5 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.9 percent July increase.

Capital Goods Industries

Nondefense

Nondefense new orders for capital goods in August decreased $5.6 billion or 7.5 percent to $68.9 billion.

Defense

Defense new orders for capital goods in August increased $0.9 billion or 9.4 percent to $9.9 billion.

As durables orders collapsing, on top of all the banking issues, will likely drive a large increase in layoffs/firings over the next couple of months as companies adjust staffing levels to cope with lessening demand.  And already there's this:

 

Mass Layoffs Up

 

The Road to Global Economic Collapse

As we continue down a road which sure looks like the onramp to a global economic collapse from here in the Texas outback, there are all kinds of contradictory signs and portents.

 

For example, one headline says "China Banks told to halt lending to US Banks - SCMP" - that's the South China Morning Post - a major news outfit.  But shortly after that story crossed the wires, we read how "China denies shunning foreign banks..."  A couple of decades of doing news analysis has taught me that where there's smoke, there's often fire, so we'll watch the smoke and see if flames break out.

---

The George Bush speech last night stopped short of being as harsh as we tend to be around here, but still, he's admitting we're in the midst of a financial crisis.  Say, you don't think he bears some responsibility for this, do you?  Naw...'course not...

 

As I've said, there is a simple solution - namely the private sector coinvestment idea - where the public would benefit more than the banksters from fire sale asset valuations, but that isn't going anywhere because it's just too damn honest.

---

The usual shenanigans (here, have some pork...)  have been holding up the new federal budget but a stopgap measure has been passed by the House.

 

Bank Run

While it may seem like the folks in Washington DC are just setting up bank runs in America with their various dire comments, we have to note that "Hong Kong Savers Fret as Bank East Asia Fights Rumors".  If you thought Bird Flu was contagious, wait till the bank runs start here - a worrisome outcome as we wander down the economic collapse track.

 

Lower Car Financing?

The House is busy rubber-stamping a $25 billion dollar bailout for the automakers.  Again, this is our tax money at work here.  Wonder if I could get a government bailout for low-income Peoplenomics.com subscribers.... Barring that, I'll be voting to throw out all incumbents.

 

Still, buying a mini van might make sense - one large enough to live in...

 

McCain's "Health Issue"

Since January of this year, and earlier (I don't have time to go back through all the www.halfpasthuman.com reports at this hour) there has been an expectation building that John McCain would 'withdraw from the presidential contest because of 'health issues'.  Linguistically, it looked (just to pull one reference out) like this:

"There are a number of supporting structures indicating that [mccain] will have [suffered] large and [debilitating] [failures] from mid [summer] through to a sort of 'peak of woes' in August/September. Both the [publicly visible failure/corruption], and the [health problems/mental illness displays] will have taken their toll, as will the [flight from the republican party] as a result of the [climate problems] and the [coercion/slavery issues] which also appear in late [summer]. The [slavery issues] will be directly [sprung] from the [corporatacracy] and will have some [insidious impacts] on the [vision] and [views] of the [republicans]. This will further be compounded by the [thrashing] which will hit [mccain] as a [candidate] on the [corruption] issues. Note that the [currents/flow] of the [corruption] meme linked to [mccain] will be in the noncorporate media, though it will be very much part of the global mediastream and hugely impacting. This precipitates the [calls for early election] meme within the [non mainstream media/corporate propagandists]."

And then by May 31 of this year, the linguistics were painting in a few more details:

"The highest level of linguistic support gained during that period is under the context of [bankruptcy], and further, that whole set is cross linked extensively over to the Markets entity (via internal linguistic sets) in mid September through early October. The 'pre-echo' part of the equation is very interesting as we have had such a late Spring to early Fall echo effect showing up under other linguistic structures which include [mccain/republican party -health and corruption highlighted], [military - defeats, withdrawals, retreats, and mutinies], [political - violence in late Spring, revolution in Fall]."

This highlights the difficulty of the fledgling science of predictive linguistics - it's like looking through frosted glass with a nice coating of Vaseline on it to boot.

 

Mixed in with the McCain health care plans, we now have McCain withdrawing from the campaign, at least for the moment, in order to focus on the economic ills of the country - not his own, at least that's what's reported.

 

As the K.C. Star notes today, "McCain suspended campaign; are TV ads next?"

---

This ploy of McCain's - ducking the debate and the showmanship involved in going to Washington - is really quite hollow on two fronts.  First, Barack Obama is not wanting to cancel the debate.  Of course, then George Bush stepped in and bailed out McCain...so Obama is going to the meeting it seems...

 

But a second boner for McCain to pull, was cancelling at the last minute plans to be on the Late Show with Letterman last night on the pretext of 'rushing back to Washington'.  Turns out that no, McCain had time to do an interview with Katie Couric before catching his flight.  That prompted Letterman to ask "“Hey, John, I’ve got a question. You need a ride to the airport?”  [YouTube Video]

 

I would expect the next thing we'll see will be pictures of John McCain with George Bush, Hank 'print me some money' Paulson and Bernanke...oh yeah, photo ops galore in DC for sure.

 

Anyway, the rest of the linguistic will be interesting to watch, especially if we start seeing 'calls for an early election' in the next couple of weeks.  Our bottom line is "Oh, we get it now...

---

Not unlike "maritime disaster over the west' a couple of months before the Shuttle disaster, pulling a clear vision of the future out in advance what something like 'health issues' related to McCain turns out to all be centered around 'economic ills' not personal ones, but this should fill most of the set.  Flip back to the February 23rd edition of this column where I wrote "...and linguistically health issues will come calling on McCain before election day." 

 

Here you go:  One other headline about McCain/health issues:  "Liberal PACs ready attack ad on McCains Health."  What do you want for free and seven months in advance of events?

 

October 7th Watch

While we are certainly hoping to be spectacularly wrong about the change in life that seems to be coming on (or shortly after) October 7th, we nevertheless keep seeing pointers that suggest that date which has been on the horizon for us for more than a year, could be significant.

 

Latest indicator is a report from the Northeast Intelligence\ Network that points to a possible al Qaeda attack around guess what date...

---

I can't even begin to count the number of people who have asked if it's true that the US Army has a brigade of urban fighters rotating to the US from Iraq October 1st.  Yes, we're quite aware of that since it was in the Army Times several weeks back.  While a brigade is a fair-sized military unit, it's 3,000 to 5,000 members would likely be hard-pressed to secure even one medium-sized town in America.

 

More'n likely, they'd be a response unit should terrorists take advantage of the window of opportunity presented by economic stress and proximity to elections.

 

Nevertheless, I get emails like this one:

"9/11, our Constitutional rights have been systematically dismantled:

1.     USA Patriot Act - A 342 page document presented to Congress one day before voting on it that allows the government access to your bank and email accounts, as well as your medical and phone records with no court order. They can also search your home anytime without a warrant.

2.     USA Patriot Act II - This one allows secret government arrests, the legal authority to seize your American citizenship, and the extraction of your DNA if you are deemed a potential terrorist.

3.     Military Commissions Act of 2006 - Ends habeas corpus, the right to an attorney, and the right to court review of one's detention and arrest. Without this most basic right, all other rights are gone too since anyone can be detained indefinitely. Now anyone may be arrested and incarcerated and nobody would know.

4.     NSPD 51 - A directive signed by George W. Bush on May 9, 2007, that allows the President to declare martial law, effectively transforming the U.S. into a dictatorship with no checks and balances from the Legislative or Judicial Branches. Parts of this directive are considered classified and members of Congress have been denied the right to review it.

5.     Protect America Act of 2007 - Allows unprecedented domestic wiretapping and surveillance activities with a reduction in FISA court oversight. Probable cause is not needed.

6.     John Warner Defense Authorization Act - Signed by George W. Bush on October 17, 2007, this act allows the President to declare a public emergency and station troops anywhere in America without the consent of the governor or local authorities to "suppress public disorder."

7.     Homegrown Terrorism and Radicalization Act - Passed overwhelmingly by Congress on October 23, 2007, is now awaiting a Senate vote. This act will beget a new crackdown on dissent and the Constitutional rights of American citizens. The definitions of "terrorism" and "extremism" are so vague that they could be used to generalize against any group that is working against the policies of the Administration. In this bill, "violent radicalization" criminalizes thought and ideology while "homegrown terrorism" is defined as "the planed use of force to coerce the government." The term, "force" could encompass political activities such as protests, marches, or any other form of non-violent resistance.

So when you add in:

§  Halliburton Confirms Camps Constructed

§  Halliburton's Immigrant Detention Centers

§  Homeland Security Contracts for Vast New Detention Camps

§  Halliburton Confirms Concentration Camps Already Constructed

§  KBR awarded Homeland Security contract worth up to $385M

§  From Halliburton's own website

It starts to get a little scary."

On this final point, we agree - yes, the times are a little scary now, and unless we're way off the mark in the predictive linguistics, they're about to get much scarier.  And that brings us to...

 

---

Coping: Northerners in the South

A daily dose of humor is always a good thing, and a conversation with one of my ham radio friends about lunchtime on Wednesday revealed this gem. 

 

"George, you know how you can tell a Northerner?"

 

"No...howzzat?"

 

"We'll, they show up and order chicken fried steak and then add "I'd like white meat only...'"

 

Still smile about that one.

 

Dollar Demise

While the 'official' exchange rates are posted many places around the web, it's not often that I can share a friend's view from Mongolia:

"Here in Mongolia, the dollar is slowly losing ground against the Togrog. Gone from 1155  not quite three months back to 1147 MNT to the dollar today. Not too bad, right? Except...the MNT based economy is experiencing 34% YoY annual inflation, as of 1 Sep (Aug 07-Aug 08). What does that say about the state of the dollar?"

Unfortunately, not much we didn't already suspise.

 

"Gotta Have One" Department

While the pilot involved has postponed his jet-powered flying wing adventure - plans to cross the English Channel with a strap-on jet wing have me wondering about cobbling one up.  Wonder if the Tractor Supply parking lot is big enough for landing...hmmm... It'd be just the ticket when I need to run into town for a small farm part...

 

Of course, I guess I won't need a jet wing once my Moeller Air Car is built...still, as a stop gap measure it might be fun.

---

Send snip & save notes to george@ure.net

---

 

---

Wednesday September 24, 2008

Banksters Kaptur'ed

While the foreign press headline "Mother of all rip-off's"  (which is sadly true, as near I can reckon) there actually is some good news.  A few - although very damn few - members of Congress are standing up to be counted. including Ohio Congresswoman Marcy Kaptur. 

 

You have to see this video; I think the woman is spot on.

 

It gets better - if you have bandwidth, look what this heroine of Democracy is showing as of last week:

 

http://www.youtube.com/watch?v=mbD62gNi9WE

 

As to the testimony on Tuesday, I would have to credit Senator Richard Shelby from Alabama for getting it right.  As the Wall Street Journal note, "Alabaman opposed rescue of Chrysler, Tough on Paulson."

 

After watching a bit o f the hearings on television Tuesday, it became apparent, as the L.A. Times headlines, "Congress balks at Treasury's plan for Wall Street."

---

Knowing, as we think we know about upcoming events around October 7th and October 15th, I would personally not be surprised to see a sequence of events like this:

• Congress, finding it hard to ignore the truckloads of constituent calls and emails will drag its feet for at least two weeks.

• Right on cue, about October 7th, something will happen that will cause the Bush administration to declare an 'emergency' of some sort and that will be used as a way to implement the bailout anyway and Congress' role will be simply usurped. Specifically what this is could take any number of forms and still meet the linguistic parameters set out by the predictive linguistics out of www.halfpasthuman.com, but the possibility of a LIHOP/MIHOP to stampede passage of the Bankster Bonanza or an international consortium of dollar victim countries making a coordinated attack on the dollar would each fit the bill.

   

As I watched the testimony on Tuesday I kept having this one thought coming up in my head:  "These folks are acting as though someone is holding us hostage - almost there's got to be a $700-billion ransom note paid off right now or something very very bad is about to happen that no one is talking about."

 

I think it was the part where the Treasury Secretary was insistent on the amount ($700bn) but couldn't seem to produce a justification for it. 

 

I've been a 'numbers guy' in the corporate world in strategic planning and marketing.  I can tell you from experience that boards of directors and senior managements in any successful American company would fire a marketing director on the spot if they can in and insisted "I need x dollars for a marketing campaign - and I will be making up the details as I go along - but you gotta trust me, this is gonna work."  Get me HR on the line, please...

 

The firing would come so fast as to make your head spin, especially if the marketing director was dodging very simple and straight-forward questions. And his last campaign blew up cost vastly more than he estimated in March.

 

To their credit, the boyz on the Senate Panel were incredibly polite - and I suppose it would have been improper to get down and direct with the Secretary.

 

Still, had I been sitting on the panel, I would have several times interrupted Slippery Hank and told him "Would you stop answering the question you want to answer, and answer mine??"  There were many instances where if you listened to the question and then heard the answer, it was like Paulson wasn't even on the same planet.

 

What would happen in a very well-run corporate boardroom pitch?  Paulson would have walked in with a projector and put up a PowerPoint with some spreadsheets, and he would have made an air-tight case on how the estimate of $700 billion was arrived at.  There would have been a list of key players, some probabilities, and a process map.

 

Instead, what the Senate ended up hearing was a cocktail napkin plan interlaced with many repetitions of "Trust me on this..." Yet wasn't Paulson one of the key insiders until 2006 in building up the game?

---

Fortunately, besides figuring out how to use the internet as a time machine, my colleague Cliff's also got a technique he picked up called SKED.  That's short for "subject knowledge  elucidates domain" - and it's a way of taking a paragraph and reducing it to a sentence, and then simplifying the sentence until only a couple of key words remain.  It's a surprisingly cool technique, once you learn it, because it allows you to simplify messages and get to the usually quite simple core of a complex subject.

 

• The money is not going to be forthcoming quickly.

• Congress is not about to be stampeded.

• In a sense, they are going to "run the clock".

 

And, as this unfolds, we will arrive at our 'hot date' of October 7th when something seems bound to occur that will either get Congress' cooperation, or give the administration an excuse to simply sidestep them (again).

---

If the SKED'ing is right, and Capitol Hill is not going to roll over on this, then the two outcomes envisioned likely will emerge.

 

In traditional economics, the choices going forward are for an "endogenous" shock or an "exogenous" shock.

 

An endogenous shock would be one that emergences from within the markets.  Now, just to give you an idea of how endogenous pressures are building in the economy, let me give you two examples.

 

A buddy of mine in Chicago has a good-sized ad agency.  He's been screwed up against the wall because his largest client (a household name, I assure you) is now 60-days out on a sizeable invoice.  That, in turn has rippled into his business.  Want to invest in Maalox? 

 

And, along a similar vein, Bank of America has told McDonalds' franchise owners that they won't increase the size of their outstanding loans, and although some reports say the "Credit concerns at McDonald's are 'overblown'" I don't think so.

 

In both these examples, what's going on would be considered 'endogenous' - arising from within the market and driven by market forces.  Big players are pushing down on smaller players in a sort of 'big fish eats little fish' way.

 

The other case, where something 'outside' the market happens could be something like an attack on Iran (not likely until elections are held in Israel, by the way), which might cause OPEC to stop selling oil to the US or the West.  This would be considered an 'exogenous' - outside the market - event.

 

Or, we might be combination of items: An endogenous meltodwn around our October 7th date, an exogenous event around October 15th, and then hitting Iran toward the 25th...which would make things about as messy/bad as we can imagine, but since we're set for 5-months of 'emotional release' might be as messy as can be imagined,  I wouldn't rule out some super-sized sequence of events like this.

---

Short term market direction will be known later today.  The pre-open looks like a positive start, so it seems according to broker Robin Landry up in Shawnee, Oklahoma, that we could rally for a week or so to  11,700 or even 11,800 at the outside before turning down again..

 

But, and this is a big but, on the other hand, says Landry "If we see the Dow break below last Thursday's low of 10,459.44, then Katy bar the door - we're going down..."

 

One thing that seems to be taking place is that the dollar is coming down from recent highs, perhaps indicating that the counter-trend rally from the longer term decline of nearly 30% is over and resuming the downward move.  Recall that the Dollar and Euro were about at par in 2000, but here we are 8-years later and the dollar is down to 0.6810 Euro when I glanced at it.

 

As explained yesterday, competitive devaluations are a very, very bad thing in a country like ours where we have to borrow $2-billion a day from the rest of the world to meet our consumption habit (see the balance of trade deficit) - and if there is a bailout, that will mean printing up another $2-billion a day (or more).  Someone sure as hell oughta be asking "Who's going to buy all this paper we're going to be printing up?"  That's a hard question to answer, and the lower the purchasing power of the dollar goes overseas and the more expensive things will become here. at home.

 

This is mostly fallout because your regular monthly mortgage payments were not enough for the Banksters:  They took your payments and turned them into a floating craps game - and now that they  have mostly all lost, they're expecting to put the craps game costs onto your shoulders.  There's a certain desperation in the Paulson/Bernanke plea that isn't yet explained.

 

Do we acquiesce to their demands?  Not no but hell no.

 

Fraud Probe

Meantime, the FBI has launched a fraud probe into "Freddie, Fannie, Lehman, and AIG" reports the NY Post.

 

More Direct Justice

Meantime, while we keep tripping over linguistics that go to next year's 'lamposting' of banker types, here's a headline that may be considered the very leading edge/prequel to those events: "CEO murdered by mob of sacked Indian workers."  

---

Wonder if that CEO had gotten a bonus lately?

 

Buffett Buys Into Goldman

Seems the Oracle of Omaha is about to dump in 'sachs' of money - $5-billion or so.

---

Can't figure out why I haven't heard back from anyone on my "National Bank of George" proposal.  I figured that because our only 'toxic waste' was from the goats (if'n you follow my drift) I would have herd (sic) back by now...

 

What Happens In Vegas...

No, they're not rolling up the Strip at night...yet.  But, the economic slowdown has hit places like Las Vegas hard.  Unlike the investment banksters, most Americans have enough common sense not to play craps with their mortgage money...Besides, who needs a casino when we have day trading in the financial sector?

 

Russian into Venezuela

Headlines like "Russia engages in 'gangland' diplomacy as it sends warship to the Caribbean" are worth watching.  No, the Russian sailors are not singing "Georgia on my mind" as far as we know...

 

Biden her Time

With Barack Obama essentially telling running mate Joe Biden to chill, we are about to start a new pool here at the ranch on what day with the democorps panic and put what's her name in place of Biden on the ticket.  But of course, not before what's her name gets a chance to vote to the MY bankster bailout...can't have things getting off track...

---

That "Economic fears give Obama clear lead over McCain in Poll" just goes to show how many people don't understand that if you vote for either party, you're part of the problem.  They share about equal responsibility for the current mess, as I see it.  Lord knows they both suck up money from the same lobbying groups - I don't know why they don't just auction their votes in public for the most part. Where's the new direction going to come from?  The same old reruns?   Shot of Jack, anyone?

 

Meantime, Global Corruption

There's an outfit called Transparency International that tracks corruption globally and says "
Persistently high corruption in low-income countries amount to an 'ongoing humanitarian disaster'.  They're out with their annual report this week:

"The Transparency International CPI measures the perceived levels of public-sector corruption in a given country and is a composite index, drawing on different expert and business surveys. The 2008 CPI scores 180 countries (the same number as the 2007 CPI) on a scale from zero (highly corrupt) to ten (highly clean).

Denmark, New Zealand and Sweden share the highest score at 9.3, followed immediately by Singapore at 9.2. Bringing up the rear is Somalia at 1.0, slightly trailing Iraq and Myanmar at 1.3 and Haiti at 1.4.

While score changes in the Index are not rapid, statistically significant changes are evident in certain countries from the high to the low end of the CPI. Looking at source surveys included in both the 2007 and 2008 Index, significant declines can be seen in the scores of Bulgaria, Burundi, Maldives, Norway and the United Kingdom.

Similarly, statistically significant improvements over the last year can be identified in Albania, Cyprus, Georgia, Mauritius, Nigeria, Oman, Qatar, South Korea, Tonga and Turkey. "

Iraq is the third-worst in the survey - only Somalia and Myanmar are judged more corrupt, while Afghanistan is fifth worst, a notch better than Haiti. 

 

Your tax dollars at work.

 

Not So Nice Ice

No, we don't have bad guys running around the globe setting off subsea explosions in deposits of methane hydrate, as in the Clive Cussler/Paul Kemprecos novel "Fire Ice".

 

Instead, we have ocean temps coming up which is, as a New Zealand headline puts it, nothing short of a "Timebomb ticking away under Arctic." 

 

Not to worry though, at least if you can your breath for a while - say 10,000 years...

 

---snip and save section ---

Coping:  Rainforest Strategy...

Gem of an email this morning from author Michael Q. Pink:

"George...I've been following your column for some time now and have a growing appreciation for your work and conclusions. I have one question and a suggestion. First the question... Didn't the predictive linguistics suggest an American earthquake of significant magnitude between the summer solstice and the fall equinox? Now to the suggestion... It seems that October 7th (approximately) comes up as a much harder date with predictive linguistics as being a financial trigger of huge proportions.

 

I have spent 3 1/2 years researching the rainforest as a business model due to the simple fact that it is the most fruitful, diverse and abundant ecosystem on the planet despite having limited capital (poor quality, shallow topsoil) to work with. How it manages to produce abundance from scarcity is what every business person needs to know.

 

Here's the point... my publisher tells me that "street week" is October 7th. That's when it is scheduled to hit the street... the same day as the financial shaking is predicted to hit the headlines and everyone else. Can't change the date, but just maybe this whole October 7th thing and the shake up coming is because of my new book, Rainforest Strategy - The Planet's Most Successful Business Model. OK - So I'm not serious about the connection of the dates, but I did think you would be interested in knowing about the book. You can check it out here... www.RainforestStrategy.com 

Yup - definitely goes on my reading list...As to the quake, We had one a while back that met most of the parameters, but the location was wrong - something we have a hard time getting right.  So, we'll just see...

 

As to October 7th - remember, we're wrong more than right - and this is one where would LOVE to be wrong...

---

Send snip and save items to george@ure.net

--- end snip and save section ---

 

Around the Ranch:  Jack and the Geese

Something to think about if you are wondering "How cold will this winter be?"  A ham radio friend, Jack, who lives on one of the many lakes here in East Texas reported last evening that the first of the season's Canadian geese have arrived over on his lake.

 

Two or three weeks early, by his reckoning.  Which I expect will mean a somewhat early winter up north.  Sorry.  The geese are as good as the Weather Service by local accounts.  Or, better. 

 

---

Tuesday September 23, 2008

Leading Edge of Calamity

It's there if you look at the headlines in a certain way - not a big story in most of the nation, but in some parts of the East and Southeast, there's a gasoline shortage.  The headlines are coming out of places like Atlanta where local stories about "Gas shortage makes finding fuel a challenge" and in first-hand reports like this one from Aiken, NC:

"By the way, there is no gas in Aiken--AGAIN. I saw a fight break out between two people waiting for one of the last pumps....not pretty when people panic. It makes no sense--the lack of gas that is. A couple friends of mine here went to Nashville over the weekend. They almost didn't make it home because they could not find any gas stations open. They finally found one but it only had regular--no premium, etc. There hasn't been any premium around here either... all you see are paper bags over the handles. Diesel (pronounced deeesaal) is more plentiful, it appears.

I believe I am gunna have to buy me a truck..."

 For now, the word out of the Nashville area is that "Rationing and drastic steps ruled out in fuel shortage", but it's one of those stories that I look at as a 'leading edge' kind of thing.

 

The way Cliff predictive linguistic works operate, we often get periods before 'big change' of less change - something you could think of as the 'prequel to the sequel'.  In this case, I mean in addition to watching the terrorist bombing in Pakistan and the drop in the stock market yesterday which may be feeding into the events of/around October 7th and 15th, I personally find the gasoline situation of particular interest.

 

A short discussion of the reasoning may be in order.

 

As you may be aware,  the USA depends on people in other countries to buy our debt instruments (Treasury instruments sold to overseas buyers) in order to finance what has been a long duration negative balance of trade deficit.  That's a polite way in economic circles to describer "America is spending more than it's making" so we have to 'borrow' the rest from foreign investors.

 

As I pointed out in yesterday's report (and updates) the problem at hand which is mostly unrecognized by CONgress and the Treasury (and let's not forget the Fed, although we might like to), is that the folks who will essentially have to pony up the dough for the bailouts are not the Taxpayers like us - at least on the front-end - it's the foreign buyers of US debt instruments.

 

A back of the envelope kind of number is $1.8-trillion dollars.  To keep that number in perspective, the USA's gross domestic product is about $14-trillion, so we're talking what?  12% of everything made and sold by America in a year?

 

This that's alarmist?  Elsewhere this morning we're reading that "Banks take bigger-than-estimated hit on Freddie, Fannie Conservatorship".  Gee, at least try to feign surprise, wouldja?

 

Or, if we look at what that will do to America's debt picture, that means over the coming 24-months, that could bump up the balance of trade deficit by  as much as $75-billion a month.  Or, for short-hand - double present deficits.

 

All of even this seems fine, except that the folks buying our debt - many in Asia and China - haven't been consulted direc6tly.  I have to imagine that they are sitting back thinking to themselves "Gee, if America is going to print up all this money, thereby diluting the purchasing power of its Dollar, maybe we should do the same thing..." 

 

In short, we may be on the verge of lighting off a global competitive round of currency devaluations.

---

Such an approach may not be all bad, although it may feel that way at the Mr. & Mrs. Sixpack level.  Once you understand the specific mechanism, competitive devaluations could actually be cast as a good thing.

 

Let's say that one of our trading partners were to devalue its currency.  Say it's England.  If the pound was suddenly worth less, we would demand more pounds to buy the same amount of goods as previously.  On the international side, devaluation means a country has to pony up more currency to buy something.

 

However, if you happen to be living in England when this 'devaluation' takes place, the effect is suddenly inflationary.  Because it took more Pounds to buy something from the US, the external devaluation results in inflation domestically.

 

Now, let's flip that around.  Suppose the devaluation is by the USA and the trading partner is....oh...OPEC. 

 

What's going to happen?  The number of dollars paid by the USA for a barrel of oil would go up?  (I trust you're with me so far?).   Do we see anything in the headlines that points in this general direction?  Oh, how about this one: "Oil soars in record one-day gain".  Up $25.45 yesterday.

 

Naturally, when you have a big move in a market, there's usually a 'dead cat bounce'.  In the case of oil today, we're seeing that it has pulled back, but nowhere near enough to make up for the gain recorded yesterday.

 

similarly, gold, which was bumping up around the $900 level yesterday, being up nearly $50 at times in the commodity futures market, seems to be down, but only a bit, after yesterday's rise.  "Gold slips on profit taking as dollar recovers" but such is to be expected because the market hasn't penciled out all the implications of the $700-billion bailout which is pending and the other heaven-knows-how-much already spent.

 

If you're a 'noise trader' or 'day trader' in the markets, you might be able to scalp a few points here, or there, but it seems to me that the most rational way to play things is to sit back, realize that there's a tide turning here, and do your best to maintain purchasing power as events unfold.

 

In the event we get into a deflationary collapse, having money in a TreasuryDirect account would protect some assets, while on the hyper-inflationary side, a some assets in physically held gold or silver would cover that eventuality.  The main thing to position yourself as close as you can to our "can't lose either way" philosophy. 

 

Personally, if it means I won't make a killing in here, so be it.  I have only a couple of positions in the portfolio at the moment: A couple of commodity market call options on $25 silver for December delivery and a short position via S&P put options on the S&P which I pondering whether to ride to maturity, or let them go on the next good sell-off and sweep the money into Treasury TIPS. 

---

But, in the meantime, the most important things on my agenda this week are new hiking shoes, a few drums of investment grade diesel (that's diesel with long-term storage stabilizer in it) and basic upgrades for the house because as I see it, if the global competitive devaluations occur, things like a new TV, or in our case a new refrigerator, may never be so [relatively] cheap as they are now.  You ever try to find an American-made fridge?

 

By the way, there is a good one (we'll be checking delivery times today) - the Sun Frost RF-19 - because it can be had in a 110/volt/24 volt version which could tie into our 24-volt solar system.  The problem not so much the $3,500 price tag (once you get crating, shipping, and the right finish) -- it may be whether we could get one here before October 3rd, which I've set as a deadline for getting things delivered because of what may be major changes in how the world operates the following week.

---

To be sure, there's a lot of rage floating around the net at the sweetheart deal the Fed/Treasury have cooked up for their Bankster buddies.  The headlines like "NO to the Paulson-Bernanke Derivatives Scam Bailout" are easy enough to find (and mostly right on point), but while my personal feelings are "Yank Hank!" it's all quite pointless to lose focus on the real matters at hand, and that's getting ready for what happens (linguistically) next month.

 

The way I've got it figured, the checks for the lobbyists are going to outweigh anything I'll be able to offer - including the honest solution to the bailout (Private Sector Coinvestment) that I put forth in yesterday's column.

 

One reader wanted to know what that phrase meant: Private Sector Coinvestment.  As simply as I can, it means if the greedy boys on Wall Street are going to cut a fat hog on the bailout, they would be limited to on a 10% stake in any deal and the public would be in for 90%.  In simplest terms: If the Wall Street makes $1, then Main Street would make $9.  Even after throwing in 3 to 5 bips (basis points) if we had to for the pros to manage their deals, it would dramatically cut the public cost of the bailout.  Which, I reckon, just about torpedoes any chance of it happening. 

 

Just too simple, honest and American.

 

So, while headlines like "Fears emerge over $700bn rescue" (and rightfully so) CONgress is going to do whatever makes it the most poll points and contributions.  Our more cynical view runs to "If you vote either republican or democrat, you're part of the problem."  There is, anymore, only one party in America that owns both sides of the race, and that's the CorpGopv party.

 

Warming Questions

This afternoon at 12:30, NASA is holding a press conference to discuss recent changes on the sun which until yesterday had included an amazing lack of sun spots.  While a single decent-sized sunspot has emerged, I expect NASA will be talking about the impact of a cooler/less active sun on climate  here on Earth. 

---

Not that the science will stop any of the Global Warming mantra being fanned by the corpgov's back office.  Too much money to be made by trying to give ranchers like us $4 an acre per year not to cut down trees for 10-years and then trading carbon credits (the real game) on the side.  I doubt many farmers/ranchers will accept $4 per acre per year to give up rights to manage their own land, but that hasn't slowed down the stampede to trumpet the virtues of carbon credits.  It's like trading "I don't beat my wife credits" as I see it.

---

Get back to me when Al Gore is driving only a 60 MPG vehicle and taking the train everywhere instead of a jet to events; don't try to swindle farmers with a carbon credit-money-making scheme.  Try to remember how the mortgage craps game worked out, too, while you're at it...

---

Yes, carbon dioxide levels are dangerously high. and warming pressures are real. But to try and monetize every problem we face as people is not intellectually honest.

 

War Drumming

The stories are popping up all over the place around Iran - as though to be setting the stage for whatever the PowersThatBe have planned as a shock-and-spin for October.

 

The J-Post headlines "Military Intelligence: Iran halfway to first nuclear bomb" while "UN agency: Unsure if Iran hiding nuclear program."  I assume you remember from logic class that negatives/null sets can't be proven?

 

Simmering Insurrection

Small, but our correspondent in Indonesia sent it along as one of those things that might make MSM stateside: "Indonesia police arrest 18 for raising Papua separatist flag."

 

The Runs: A City Called Obama

Only in Marin County up north of the Golden Gate, could you find something like this:  "Marin County Town Changes Name to 'Obama'.  Not exactly a groundswell, however.  The population of this berg is only 55.

 

Still, it gets me to thinking "Hmmm...wonder if we could get Montalba, Texas to change its name to 'None-of-the-above, Texas'?".  Never happen, of course.  I think there's only three ranches in the area (including ours) that don't sport McCain-Palin signs. 

 

Pass the Carats?

A new diamond has come out of Lesotho:  Just under 500 carats. Don't tell the missus: You couldn't even afford the security on this monster, more'n likely.

 

Space Case

Engineers in Japan are working on a "space elevator" which would run a cable from Earth's surface up to a geostationary platform orbiting the planet.  Once they get the cable in place, they'd simply run an elevator up to geostationary orbit.  Might want to run that idea by the local Otis serviceman.

 

---snip and save section ---

Coping: Voluntary Lifestyle Downgrades

I started work (between everything else going on) yesterday on research for this weekend's Peoplenomics.com report.  While working on it, what slowly dawned on me is that it may be time for most of the country to start penciling out "activity changes" in life.

 

Think of it this way:  The predictive linguistics work has clearly labeled 2009 as a 'year of transformation' - and we've already gotten, as recounted in our lead story this morning, what may be the leading edge of a period when much of America will be involved in shortages, rationing, and what-have-yous.

 

It's easier to accept change when you decide the time and place yourself, rather than being forced to change when you're not especially keen on the idea.  So one of the topics we'll be exploring this weekend is 'activity change' now. 

 

The nickel's worth discussion goes something like this:  If you can envision a change to a period when your electric power is off, your home is cold (and the pipes in danger of freezing in the winter), and when food is scarce and long lines to everything is the order of the day - gas at $20 a gallon, and so forth, what will your new activities be?  I mean besides standing in line?

 

There is a tremendous amount of "just in case" reading material out there which can point you along the way such at Dmitry Orlov's "Reinventing Collapse" which goes through many of the highlights of how the former Soviet Union (FSU) collapsed.  Orlov points out, many times, that the Soviets were much better prepared for collapse than America because they had not regimented their lifestyle so tightly to the high consumption footprint we live today.

 

So this weekend, we'll get into 'activity change' in some detail, but as something to think about even if you don't subscribe to Peoplenomics - What are you going to do when the lights go out?

---

Send snip and save items to george@ure.net

--- end snip and save section ---

 

---

Monday September 22, 2008

Special Update

Running to Keep Up With Events

Since Cliff and I were on CoastToCoastAM overnight, events have started to unroll at breakneck speed.  So here's a summary of what has changed since we were on:

1. In our interview last night, Cliff pointed out that the latest output from modelspace seems to indicate that the meltdown in October will likely split into two components.  A financial aspect which will hit about October 7th and then a 'military' oriented event(s) that will happen about October 15th.  Then, this morning's editions of the New York Sun headline that "Spies Warn that Al Qaida Aims for October Surprise."

2. The next thing up was a phone call from m,y tax attorney/CPA who has been keeping track on the back of an envelope - he says that as far as he can figure, the cost of all the bailouts willk total about $1.8 trillion dollars, but in his estimate (remember, he's only a tax attorney and CPA - not an advisor to any of the players) the real total could run upwards of $5-trillion dollars when all is said and done.  The problem he outlines is this:  When you read up on how much the bailout will cost bear in mind that the biggest players have not yet indicasted their feelings on the matter.  And those 'biggest players' are whom?  The foreigners who will end up loaning us to money to do our bailout.  His point boils down to this:  We're already borrowing about $2-billion a day to keep America solvent (we've been living on credit for years and that's our balance of trade deficit calculated daily.  So now, if you are a foreigner investing in America, you have to ask youself this question:  If we're already lending the USA $2-billion a day, should we lend them an additiona $1.8 trillion - or maybe two or three times that in order to bail them out?  In the end, my tax attorney/CPA pal says nope, someone's going to blink, global competitive currency devaluations will be "Game on!" and the dollar will get slammed.  Of course, as a long term reader, you'll recall that when when the dollar is devalued internationally, the prices we pay domestically for things will seem to go up.  Thus, if the dollar's value drops by half, the prices we pay on the global market for flat screen teevees, oil, and other 'necessities of life' will double.  Gold is up over $25 an ounce the last time I looked and a doubling of gold would put it near enough to $1,500 an ounce..

3. Then my pal "The Bond Dude" called to say "You missed it - ever so slightly."  Oh-oh...being in no condition being sleep deprived, I made him explain slowly what I missed:  "When you're talking about the Private Sector Coinvestment idea, that's on the front end - before the government money goes in, so that as soon as the private guys make their slice, they will take out the public 90%.  In other words, it's a buy-in on the front-end, not the back...".  OK, that's making sense.

 

OK, now back to 20+ voicemails, a hundred emails, and then maybe I can get some client work done...

 

CoastToCoastAM Graphic

In our discussion of how the webbot project orf www.halfpasthuman.com works, the following graphic is useful to consider.  Think of an 'event' in our immediate future - such as the 'life changer' that shows up in modelspace on or around October 7th, 7:10 UTC or so, as a rock thrown into a still pond.  We'll call it the "Event" in this drawing:

 

 

 

 

Unfortunately, the future is never so simple as a single thought, a single rock.  Nope.  The Universe makes things unfathomably complicated by not dumping in 'an event' this time - it's more (as Cliff puts it) like a series of gravel trucks are backed up and dumped into the pond, day after day for the next six months.  That, in itself should give you some ideas about investing in diesel, buying hiking shoes, having stored foods, and so forth.  Whatever it is we're seeing in model space, life is about to go through a dramatic change of 'order'. 

 

The highlights are Massive change in financial structures (ongoing, see next item) then whatever the October 7th events are, then a series of release or emotions events till March 2009.  Something with a lot of 'military' aspect to it on October 15th, or thereabout.  Then one big earthquake, likely Pacific Northwest around December 10th, with another one within days (Dec. 12th in model space). 

 

Then we get rising discontent/talk of rebellion/revolution through the spring, the Summer of Hell in 2009, and strange disappearances - but it ain't the Rapture - think more like 'the harvesting' starts in late summer 2009.

 

Me?  I'll be going on an anorexic diet.  Don't want to look like a main course come 2010.

 

Taking Back October 7th

One Chance to "Save America"

How to Save the Day with Private Sector Coinvestment

 

The first thing you need to understand is that any media reference to the Resolution Trust Corp's bailout of the Savings and Loan mess is a deliberate misleading of American public opinion so that our collective life savings can be hijacked by the bankers cabal.

 

The key difference to keep in mind is this:  In the case of the RTC, when the assets were rolled up and resold, the main players went out of business.  In the flim-flam now being pulled on the American public, the main players will not only stay in business, they will make new fortunes paid for with your tax dollars.

 

Oh, and if you think this stinks, that's the smell of greed.

 

Now how to fix it?  There is a very simple way - and I would urge you to write something along the lines in an email to your federal elected representatives:

---

 

Dear (elected official):

 

I am writing to demand that any bailout of investment bank include a mandatory requirement for private co-investment.

 

As you know, the current plan proposed by the Treasury - and now being rushed through approval is designed as follows:

• Financial Institution with 'bad paper' will be able to sell their paper to the government.

• The government will then sell this paper to other investors at whatever discount they need to in order to 'keep the system alive'.

• The buyers of this paper from the government have no incentive to bid up prices because the farther the asset valuation falls, the more money the bankers will make.

• Ultimately, the public will fund the difference between the current valuation of the instruments and however low these same investment bankers can drop their bids.

 

Obviously, this is an absurdity because under Game Theory, the lower the bids are when the government sells, the higher the yields on these debt instruments. 

 

What's worse, an instrument sold my one firm, such as hypothetically Goldman Sachs (or more likely the Goldman Sachs Asset Management group) could ultimately be  purchased from the government bailout agency purchased by Morgan Stanley.  At the same time, a hypothetical  Morgan Stanley\asset  sold to the government could ultimately be picked up - dirt cheap - by the same Goldman group selling their hypothetical paper.

 

To my way of thinking, this "bailout" is a flim-flam deal.  The investment "banksters" could 'wash the paper and take the spread' as things are presently proposed.  As a Taxpayer, I am appalled and demand a better solution.

 

Is there an alternative?  Of course!

 

Write and enforce a new provision requiring that any sales of government purchased instruments to private firms retain a minimum 90% public participation.  Thus, when the [toxic waste] bonds are resold by the government, the tax paying public which is footing the bill would be compensated for its risk.  Give the paper vultures compensation with a small 1-3 basis point spiff for managing the public's side of the deal.

 

The new deal structure would look like this:

• Financial Institution with 'bad paper' will still be able to sell their paper to the government.

• But because the government will sell only a maximum 10% private share (the rest being the public's skin in the game) the markdowns would likely be less.

•  The public would retain a 90% ownership position.  Thus any profits made by the paper vultures would be diluted 10:1 and the public compensated for its risk.

• In this way, the public would make back much of its initial cost and the debt load on the American financial system would be lessened dramatically - reducing the ultimate cost of the bailout dramatically.

 

As you can readily see, this approach - let's call it Private Sector Coinvestment - will work very well, although now that the investment bankers have "seen the green" in the form of the rudimentary "bailout plan" which is nothing short of a banker's coup d'état, will scream bloody murder when a rational and money saving plan is proposed.

 

It all comes down to whether you represent the interest of the People, or the interests of the Bankers who began their theft of the American economy in 1913, but that's another story.

 

As a vote in your district, I beseech you to look out for the interests of the American Taxpayer and honor the intent of the Framers to defend and protect this Great Nation.

 

Sincerely,

 

 

(share this freely)

---

One of our readers put it this way:

"I see a recurring sales technique. Show up at a time of panic and write the deal you want knowing the client will sign anything so long as sales properly delivers the "We'll take care of you." marketing scheme. Not a bad way to write insurance. We just got rolled, again."

What?  You mean you haven't read Naomi Klein's " The Shock Doctrine: The Rise of Disaster Capitalism"?  Tisk, tisk, however are you going to keep up with the class?

 

I'll be approaching a few folks I know in the investment community - who knows, maybe I'll get lucky and find an honest firm out there.  My friend The Bond Dude - who originated this concept  and shared it with me - will be trying to drum up support in his company, but it's of such importance that we decided to 'shop it around' a bit and see if there are any white hats left in the world of high finance.

 

And, As a Special Bonus...Department

How's about a $2.5 billion bonus pool for 10,000 Lehmanites?  Even after being up all night I can pencil this out at $250-thou per employee. 

 

Gee, why does George call them "banksters"?

 

But Wait, there's More...

The headline that "Foreign Banks Hope Bailout will be Global" should scare the hell out of you - because we as a nation probably don't have pockets that deep.

 

Except that it's not funny, Paulson should be serving his "bailout plans" up as Letterman monologs.

 

Break One Business Model, Try Another

We are naturally appalled that the Federal Reserve is rubber stamping the recasting of Goldman and Morgan Stanley into bank holding companies.

 

It's like after the all-time historical max in financial malfeasance these guys are being invited to become full fledged bankers.  In any other industry, they'd be black-balled. 

 

It's like rescuing a pilot who would have died in a plane crash - and giving them another plane to go crash!  This is "regulation"?

 

The Runs:  Planes, Cars, and Whatever

Since the only candidates on the ballot this fall both get checks from the same corporate masters, it seems almost pointless to cover, but in the interest of not getting too detached from the world, we have Democrats raking McCain over the coals for 13 cars.  Don't hear them complaining about Jay Leno's collection though, do you?

 

Meantime, Barack Obama is tooling around between speeches on his jet, which from my airline days I recall as burning about 870-gallons per hour... but you can't walk, you know.

 

If these guys were really the 'best and brightest' out there, why is my site and The Bond Dude explaining how to hack the cost of the bankster bailout?  Where the leadership on this from either of the wannabes? 

 

Here's my Economics 605 Lecture of the Day:

"Democrats promising quick action on the Rescore Bill means they won't read it.

I think the part where the SecTreas put his decisions under the "emergency" above the law is cute. 

 

Doggone Chavez, Redux

Gee, with all those American defense contractors tied up making hardware for the Gulf, 'defense' of Georgia, and the like, we can't help but notice that Venezuela is planning to buy Chinese combat aircraft.

 

Say, which do you think Chavez is more worried about:  The last days of "Shotgun" Cheney or the early days of John McCain? 

---

Meantime, the local gun store is telling me "Buy that AK-47 before Obama gets in or you'll never be able to get one...

 

Whatever...

 

Self Fulfilling?

Panic in the Nashville area has caused gasoline to become scarce...with the emphasis on the scare part.  And there are some shortages reported in Atlanta where headlines like last week's "City of Atlanta has 15 days of fuel left for city vehicles" certainly adds to jitters.

 

Sick Milk...

...toll in China now up to 53,000.

 

Where's our Next War?

With time running out for Bushco to launch a new front, the headline today that "Iran moves closer to nuclear weapons capacity" seems like yet another pre-justification.

 

Naval assets in the region are around 70 ships - and yes, I think the Bushco guys will go for it...just awaiting a 'shock' attack to spin things into place.  Expect to find Iranian connections tied to it and off we'll go.

 

--- snip and save section ---

Coping:  Pumped

A couple of readers wanted to know about the manual well pump we were putting in here at the ranch - which arrived last week:

"Which manual well pump did you b uy and why? I'm in the process of driving a well for my garden. I plan to use a small pump, hand pump, bike-powered pump to fill my 150 gallons of rain barrels and 300 gallons of tote-tank for gravity-powered use later. Any advice is much appreciated. Thanks and enjoying your insights online."

Talk to the guys at www.simplepump.com.  Dave I think his name is.../it's the middle of the night as I'm writing this.  877-492-8711.  Mostly stainless and good quality - their pumps are resold by a number of outfits around the net.

 

One of the funny stories about their pumps:  The motorized version is actually used in some former Soviet block country - about 40 of them in one  field as stripping pumps for oil wells, LOL.  All I wanted is something that will be manageable at 100' but the pumps will go down as low as 200 feet.  Beyond that it gets hard to pump and there are some mechanical issues.

 

But since we live across the road from a 600 acre drilling reserve here in East Texas, you just never know when we'll need to cobble up our own cracking tower with a couple of 55 gallon drums and some locally obtained crude...

 

---

Send snip and save items to george@ure.net

--- end snip and save section ---