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Published Monday through Friday about 8 AM Central Time Except Holidays Depending on my mood...
Updated:
Saturday January 31,
2009
07:55 CDT
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Trade-O-Nomics & Those Phantom Baskets Reader writes:
Agree on the math, but not the conclusion because you didn't consider that while there appears to be a direct correspondence in exchange rates when country-to-country trade is involved, like the US with China, there is actually a fictional third party which dopes a little price adjusting on its own. Let me explain:
While the math is right when currencies are relatively stable, a change of currency screws up the works. So if there's $100 of imports now (with the $100 being a non-dollar benchmark 'reserve currency basket') and $50 of exports, again at the market basket currency rate, the math works fine.
Key Concept: When two countries trade, both expect to be able to buy goods from third parties. To visualize this, suppose we are looking at US trade with China, but at the end of the day, both the US and China want to take their money from trade and go by diamonds (*or whatever) from South Africa. We'll assume, for the purposes of discussion that demand and supply of diamonds is stable, that price-demand elasticity is not involved in the two trading partners and a we'll freeze-frame a zillion other variables.....Come to think of it, you do know that economics is a sport made of assumption tables which never work, which is why formulaic economics, rather than conceptual economics blows up as soon as thresholds are passed? But that's a different paper...
So now let's just devalue the dollar by some large amount vis the external third party stable metric (Rand in this case)...say 50%.
Hence. in order to get the imports, the 'cost' in domestic 'dollars' (after Rand conversion) to the market basket reserve/trading currency (Rand) jumps to Rand200 from Rand100.
But, the exports sold (denominated at the international currency benchmark) falls such that at the international level (and I assume the third-party stance (Rand in this case) when looking at this stuff, because that's key to understanding trade balances and their real impacts) the overseas cost in reserve currency basket drops from Rand50 to Rand25 of 'basket'.
Now what's the trade balance (domestically) where the price changes are felt? $Rand200 versus Rand25 which to my way of thinking would be a Rand175 deficit versus a Rand50 deficit in our starting case.
So that's where I was going... No, I'm not saying the Rand is an international reserve currency. BUT what I am saying is that when a country accepts a unit of foreign currency, they have an expectation that the currency will hold its value (better, that it will appreciate) or that they will be able to flip it for something needed from another country.
Obviously, China in our example, is not going to flip everything into Rand denominated raw materials (but not a bad idea) and one could argue that really, oil is the international reserve currency which is why the US goes warring over it and why a country liek Iran is so strategically important and why we need to find an internationally acceptable way to control their resource. But again, another paper.
I should apologize for not explaining this 'third party value benchmarking' earlier - but it never occurred to me that everyone doesn't already think in these terms. Bad on me, huh? But, come on...lighten up, have some coffee and relax (if that isn't a contradictory set of concepts huh? I mean caffeine and relax, LOL). Just remember where I come from on these kinds of things:
Ure Axiom 78-B: When evaluating any foreign exchange deals, assume the position of a disinterested third-party because the internal perspectives may be misleading on either side of a devaluation. That'll usually be the trend direction because there's always a phantom international currency whether the parties will admit it, or not. And the degree of change in a particular transaction is bounded by the extremes of pure country-to-country exchange on the one hand (in which case you math is right) OR by the extreme third-party valuation on the other. As soon as even a penny goes into third party transactions by either country, the relationship goes nonlinear. Any trade deal involves three different perspectives which must be analyzed: Internal, counterparty, and third party.
In this morning's example, the internal (US) change and the counterparty (China) change seem apparent but the key is the third-party change when either the first party or counterparty tried to buy something with the 'dollars'. That's your real impact.
Moreover, we can also hypothecate a "Ure Effect" which is the secondary (or is that tertiary?) impact on the phantom basket. It's the impact on future transactions with third parties which view the implied valuations of party-counterparty trade deals among keystone players (like the US and China).
In other words, if the US and China start 'dancing' with their Dollar-Yuan exchange rates too much, third parties will start repricing their transactions with both players to reflect the higher or lower fiat unit valuations. If it's Dollar down, Yuan up, then China's purchasing power will go up with a third party like South Africa, while the US dollar will go down, which means domestically, a US citizen would be paying more for South African product as a result, while diamonds in China might go down domestically,.
As you might have inferred, I expect that the dollar's revaluation relative to any external benchmark will be down (e.g. the price we pay for things will go up because we're inside the US) hence my conclusion that the balance of trade position of the US will deteriorate over time.
Sh*t that was a long rap. What's the point?
Hold on...here it comes.... "Gold climbs to 3-month high in London as Fund Demand Increases" so sayeth the Gloomberg.
What's this? A fine example of systemic rebalancing as the dollar's value (relative to the gold benchmark) is coming down...meaning that it takes more dollars - about $120 more dollars per ounce over the past couple of weeks - to buy that damn impertinent (or so the PTB want you to believe) third-party benchmark unit.
And no, market baskets are not only eyed by third party countries but by those fourth party money moneygrubbers in the international hedge funds, which represent a special case kind of phantom currency currency basket of their own - special because it's not even considered by most economists since B-schools tend to indoctrinate linear-thinking mathologists in lieu of reasonable moderates capable of simultaneous linear and non-linear conceptualizing..
That this fourth-party special case crowd has been deciding this week that dollars won't buy as much gold, at some point the state actors (China, South Korea, et all) will be coming along also devaluing the Buck. I'm telling this is a state change you can take to the bank, but good luck sorting out which one, LMAO! --- All of which is being slowly cranked in to market forecasts...as we have just finished the "Worst January on Record for Stocks." But, then again, I told you in December that was what I was expecting, but also that at the same time, oil and gold would be getting set in the starting blocks for what I reckon will be a huge run into May or even July.
Beware what appears to be a bottom between Feb 14 and the first week of March, though. It will look like a bottom, but it's still part of the 'paper chase' and you should be trying to recover from that programming; really. --- I'm not the only one who sees this coming. "US set for 'big bang' financial clean-up" announcement next week says the Financial Times in the UK. Timing might be interesting, since my expectations for Monday-Wednesday or next week include a thousand point drop in the market as measured by the Dow - and maybe even two thousand.
If the Obama administration is smart (which I assume) they will let things implode till the 6,000 level and will then come out with their announcements once the market puts in which should be (based on chart work of friends of mine) be a meaningful bottom and turning point. Not that the market will spin on a dime there, but 'the turn' should become evident by oh, March first, or so, and if you've hung on in your 401(k) this long, there might be reason to start repeating the old Wall Street saying "Sell in May and go away". Old sayings get to be old saying because they worked at some point - and what's coming could be another. Of course, that assumes you don't mind a quick detour to the 6,000 level on the Dow first...that'll be a puker on the market rollercoaster, for sure.
Not that getting out of a 401(k) prior to these events will have been a bad idea, though. If you have exited paper assets and ensured you have minimized debt while you can, you won't be popping the Tums next week...and there's a lot to be said for sleeping soundly.
Fortunately, I'm not your financial advisor and, truth be known, wouldn't want that responsibility. I'm just a nutjob in the East Texas outback, who's got a friend with a rickety time machine, who figures self-sufficiency has already trumped paper assets. Just some folks are kinda slow 'gettin' it.
Banks, Banking, Banksters Department: Another Three Bite the Dust FDIC reporting Friday (after the close) that Ocala National bank was closed Friday by the Office of the Comptroller of the Currency. CenterStateBank acquiring them.
Suburban Federal Savings Bank in Maryland was closed and the shotgun wedding is to the Bank of Essex in Virginia. . Did I mention the Friday closing of MagnetBank in Salt Lake City? Your tax dollars at work will pay off their insured deposits.
Gee, you don't suppose that "self-sufficiency has already trumped paper assets" do you? --- Glad I'm not doing these Saturday updates. If I was I would be remiss if I didn't mention:
Data Dump Reading how the "Feds allege plot to destroy Fannie Mae data" has be wondering if this maybe wasn't part of a more than loner operation? ('scuse the bad pun, LOL)
War's a Stimulus, Right? Not to be overly cynical about such things, but "Mullen says close to 30,000 new soldiers like for Afghanistan." Three squares in a uniform of three squares in a federal camp, what's the diff, huh? --- "What camps?" OMG, you are so behind things....
No, this isn't internet hype. Go read up on "Text of H.R. 645: To direct the Secretary of Homeland Security to establish national emergency centers on military..." Six for now...
Beyond A Redoubt Folks are looking south of Anchorage at Mount Redoubt volcano since it's been making pre-eruption signs.
Quick! What does 'redoubt' mean? 3........2........1......... OK, answer here.
Helping One Another Fellow just sent me a really interesting note:
Well, I don't do too much 'advertising' on this site - it's really a humanitarian project on my part. So instead, let me just ask my reader to go look at your site and buy something if they're so moved: I just bought a Patriot Bundle....now, go make pancakes for the kids...It's Saturday chores here at the ranch and not a minute more to spare.
See you Monday...or Sunday afternoon if you subscribe to....
Retirement Dream: Escape to the Sea - A Good Idea? The arrival of an email this week about a group planning to do something called 'seasteading' - setting up whole new countries on the high seas, reminded me that I've never tried to summarize my experiences having lived on a 40-foot sailboat on the US West Coast for a bit more than 10-years, although there's plenty of learning to share from the experience. Although there may be something to be considered in the possibility of a 'global coastal event', there's a lot to be had from such a lifestyle...enough so that I could write a longish book on the topic, so pardon this week's report being a bit longish compared to most. Why, the subject of placards alone covers plenty of territory; everything from the sign that "Marriages performed by the Captain are only valid for this weekend" to the more serious (and required on vessels >40') MARPOL compliance placard not to mention the various oil pollution and disposal plaques. So pull up a long glass, me hearty - we're going boating, arghhh. Like other big decisions in life, it's a matter of trade-offs. Hate boating? See the earthquake discussion toward the end...
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"Live on $10,000" Updated What? You haven't ordered the ebook "How to Live on $10,000 a year -- or 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 or, click one of the following button:
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!)
Friday January 30, 2009 Urgent: Markets Note For Peoplenomics.com subscribers, please check here.
Revenge of the Macrocons!
Most people probably don't know what 'macrocons' are, and I
never thought of them that way until reading one book about
economics, or other, recently. Might have been Ben
Bernanke's Essays on the Great Depression
A 'macrocon' is a macro-economist and a fellow like me, who's consulting practice is in general management and marketing kinds of issues, but not necessarily purely economic in nature, might be considered a 'macrotrader' for it's the longer term moves where I have made most of my serious money in life.
As an example, I mentioned to readers when I was out in California a few years back (July 2005) that I'd be loading up on silver when it was around $7.00 an ounce ($6.94 - $7.07 if memory serves, but again, it's early).
I was pretty sure then that the price of silver would head toward $50 (or higher) and my only investment parameter was that I'd have to sit on the asset for a number of years before that came to pass. Nevertheless, the macroeconomic prospects seemed pretty obvious, which is why a bought a silver (something or other) and hold it to this day.
I believed that with the Dow at around 10,700 and silver around $7, that over the long term the inflationary pressures of the Bush Wars, the watering down of paper 'money' and all the rest would assure me a good return.
Sure enough, compared with its July 2005 level, the Dow has lost 24% of its value - and that's before taking inflation into account. We might knock off as much as another 15% for lost purchasing power, which would put paper's real decline probably somewhere between 30-40%.
The small buy I made in silver, that go-round, went from $7 to about $12 after visiting $20 briefly. That means a 71% gain, which even after backing out inflation would add up to somewhere around 50%.
The gold I bought in 2001 has performed better than paper as well. From an entry point of $270, the fix this morning is bouncing around the $920 mark; a gain of 340% means whatever you're comfortable with for inflation, if you want an apples-to-apples purchasing power comparison, gold kicked ass.
Since I bought that gold coin in August of 2001 in advance of the 'tipping point' from the earliest of predictive linguistics work - that turned into 9/11 a couple of weeks later - the Dow, which was at its worst that month closed at 9,919.58.
Just to make sure we get a clear picture of things, the Minneapolis Fed calculator says that my $270 gold from 2001 would need to be price-adjusted to $328.88 in order to compensate for inflation between 2001 and 2008, and if we throw in another 5-6% inflation for the past year, I'm good with a ballpark of $350 for the cost basis for the gold coin. That still leaves the gold buy with a 260% (+) return for the period.
For the stock market, however, the equivalent inflation adjustment would require the Dow to be at 12,083 for the 2001-2008 period, and even putting in just 5% to get it up to 2009 would mean a starting Dow on a purchasing power basis of 12,697.
A few slurps of coffee later, I notice that the current-day purchasing power of the Dow, since just a month before 9/11 has lost 35% of its clout.
Even when you had held off and bought the Dow in early October of 2002 - the depths of the Post 9/11 decline, you would have bought in at 7,286, by the time you put in inflation's effects, the cost basis would be 8,731 and then it's only through 2008. Call it 9,168 for another 5%.
Oh, and by-the-way: Those Dow numbers I'm using off Yahoo are adjusted for splits and dividends. No running from this stuff.
Based on yesterday's close - which I will charitably round up to 8,150 and using as close to the 'real deal' numbers for inflation plus dividends plus splits (and ignoring commissions - that's how generous I'm being here), you'd still be down 11% on a purchasing power basis. --- Although it may sound like I'm rubbing 'salt in it' by reminding you of these things, this web site has been here since 1995 (or so...that was long ago) warning folks about the dangers of the economic shell-games being played out by the banker class and suggesting that, as in the words of the WOPR computer in the movie "War Games",
We haven't. The creed of the macrotraders is really simple: Identify the Big Trends and get onboard with them. Make one decision based on only a few high-level facts - and you've got a better chance that day traders to have at least your starting purchasing power come the end of the game.
If you found this web site even as late as 2005, it may have helped your 401(k) if you'd gotten the concept. Even now it's possible to make macrotrading decisions but the key to it all is make only one or two very long term decisions and go with them. --- Not that it means making one decision and sticking with it for your whole adult life, though. ?That would be dumb.
The problem with that kind of investing is that you'll end up (see silver in the summer of 1987 ) only doing as well as historical averages. If you had bought on its spike over $10, you'd have lost money holding it ultra long-term by the time inflation's effects are taken into account. Again, it's understanding that there are very long waves in economics and that there are cycles both in economics and human behavior that work out over very long periods of of time, and by making a strategic move at anywhere near to the right moment, has a much better chance of retaining purchasing power than not.
For now, my macrotrading perspective is really simple: Farm land will likely go up value because there's a lot of mouths to feed on the planet. I simply consider whether the amount of farm land is going up and then look at a bunch of population clocks, like this one. If population is going up, and the amount of farm land is relatively fixed, gee, which way is food costs headed as a fraction of global income?
An approach this simplistic is easy to use: All I need to watch for in the headlines is whether or not food production technology has become more, or less, efficient on a net-net basis. Sure, you'll see that a high tech ag company has come up with a new GMO product, now and then, but balancing this off will be reports that high fructose corn syrup may be contaminated with mercury.
You'll occasionally see headlines like the one this morning that "Hungary to defy European Commission call to scrap ban on GMO crops" and wonder whether that's being done because of human needs or whether (and more likely on a 'follow the money basis') they're just bowing to chemical farming interests.
On the macrotrader's balance scale, however, even such apparent 'progress' by the chemical farming adherents is more than offset by the "Worst drought ever expected after mid January" and in South America, "Argentine farmers face ruin as drought kills cattle, crops." What the astute person reads behind the headline "Nevada a nature disaster area due to drought" is that maybe, just maybe, that East Texas nutjob who writes about the economy, and the predictive linguistics 'time monks' may be onto something when they write about the 'summer of hell' that's coming.
As my friend Robin Landry noted, a long while back and I told you at the time: "The difference between a severe recession and a full-scale Depression is famine."
Well, guess what? --- That sort of gets us around to the obvious headlines that are now at the point of becoming self-reinforcing to make the point: "NEC's loss widens, plans to cut 20,000 workers" has been announced. That "Global Layoff Festival" I was telling you about in December is here: By the time all the pink slips are counted (and it could take a while) we will likely see that we've hit a new milestone for corporate cannibalism this week with more than 1-million job losses.
Can't speak for you, but gee, gosh, don'tcha think that qualifies as a severe recession?
If there is one word you better set up as a Google News alert it's the word drought. --- And here's the thing that worries the hell out of me: I'm just a macrocon guy -- big picture sort. When I write my columns (for which I be a fair chunk of criticism for not 'offering solutions' and 'just whining' - I consider myself absolved. I told you when I was buying farm land (2002/2003) and when I bought more farm land in 2005/2006 and I'm doing research on how to pick up an additional parcel nearby. Do you think there's a clue there?
Haven't I been telling you for months that a summer of hell was on the way and that a prudent person would be ordering seeds and plotting out the plot and reading everything you could get your hands on in the way of biointensive gardening techniques? Well, of course!
And lookie here: Back on December 27 2007 I was telling you:
I also wrote this - in late 2007 - which seems particularly relevant since we're talking about macroeconomics:
To be sure, I'm not the only one fed up with the paper asset shysters. I notice that president Obama was busy yesterday slamming Wall Street over bonuses.
Unfortunately for the president, he has to figure some way to get the whole of the country from the old paradigm to the next and that involves a lot of 'transformation' - which the time monks said this year will be. Unlike the administration, which is trying to sugar coat as much of the necessary change regimen as they can, I don't feel under any particular pressure to sugar coat anything. --- And as if the macro trend on the food front is not enough, I assume you see the headlines from unionists in France that their protests in the streets are going to go global this year if corporatism doesn't start to get a lot more responsible in its treatment of the working class? Golly...you think that (and drought induced food price spokes) might cause a 'summer of hell'? --- I'm not writing this to make you feel bad. I'm writing it with the hope that you'll get off your ass, read up on the longer term trends and then start making intelligent decisions for your family. I don't roll out of every day at oh-dark-thirty to tell you smart I am - I do it because I'd wish everyone in America could 'get it' about where the country has to go in order to evolve to the next level of greatness.
Sure, it may sound like 'Revenge of the Macrocons" at some level; but would you rather be on the bus or under it?
Honey, I Shrank the Economy Nope, Bush fans aren't going to be able to hide from this one: "Economy likely shrank at the fastest clip since '82' says a headline over an AP story. --- While most of the MSM is engaged in a perverted act (visualize 'bottom picky' and you'll get it), we continue to point out the non-sugared version of things. Get ready for worse and you'll probably not be disappointed. --- NYC's Mayor Gloomberg is about to announce a "Doomsday Budget". Wham! Another 23,000 hit the rolls. --- Meantime, those corpgov lackeys who set all this up and digging in as republicorp senators vow to resist Obama plan. Hey - don't agree with much of it, but the 'kick of the country into corporate-socialism' was Hank and Ben's deal, backed by Bush, so now what, let's be sure everyone gets screwed? Gimme a frigging break. This toads pissed away how many trillions on their bankster pals (on and off budget) and now they're saying rewriting home loans is too complicated?
Look out below!
But (wink, wink, nod, nod) it's all a shell game by the corporate duopoly to keep folks from figuring out it's the folks at the top just keeping the little folks like us down at the bottom. Which is why the pitchforks come out later.
Collapsing Trade, Redux Port or Tacoma (Washington) container cargo was down 12.3% compared with December a year ago. TEU container load was down 8.5% YTD in December at Portland, Oregon. Inbound container traffic at Long Beach was down 16.2% while outbound was down 22.1%. Across the viaduct, Los Angeles was down 12.83% inbound while outbound was down a shad under 26%. --- You may not hear 'mainstream' economists telling you this yet but when the outbound is falling faster than the inbound, seems pretty obvious to a macrocon that the balance of trade for the US which suck now is going to suck even more shortly. Such is the impact of systemic collapse.
Did I mention Port of Seattle was down 13.6% for the year while December crashed down 27.6%? You could have probably done without that, I 'spose.
G.D. Pee Gross Domestic Product - out this morning - is also sliding toward Depression levels:
-But again, I'm n ot a 'doom and gloomer'. I can just read without letting a bunch of mass media brainwashing overwhelm whats in front of my eyes. More mythical numbers from the report? Sure!
That one I highlighted is a knee slapper. Yep, guess all those folks under the overpasses can save 3-cents on the dollar without those pesky house payments, huh?
Want to have some fun? Call your CONgreasman's office today and ask "What the hell is going on back there? How can you have "Americans receiving jobless benefits hits record" while the savings rate is reported going UP? WFT?"
If you get a meaningful answer - let me know. But I ain't gonna hold my breath long on this one.
Super Rally Needed In order not to see "The January Indicator" go in the crapper, the market needs a 600-point rally, or so, today. Futures are flat to down. Gee, wonder why?
Linguistics Boyz' "Dancing Mountains" Time Seattle area had a 4.6 shaker this morning. Watch Mount Redoubt in Alaska for the coming week, too.
--- snip and save section ---
Coping: Keys to the Clouds He's off asking permission from the higher-ups to allow him to share some slides that explain the difference between time-share, utility, web, grid, and cloud computing, but a PhD fellow with a well-known computer company...or should I say a Big Blue one, was kind enough to send me a clarification and then explain by phone one key aspect of 'cloud' computing which we were discussing earlier this week.
Key difference is that what Google is doing with 'Google Docs' seems not to be pure cloud computing because in true cloud computing the physical infrastructure is location-independent.
Yes, Google uses servers all over the world for dishing up search results, but that's primarily done with content router concepts - which makes it more grid oriented, if I've followed the concept.
In true cloud computing, there's something of a parallel traffic system (to IP addressing) which routes to different physical locations which make up the cloud such that the 'cloud' itself is 'smart'.
The best thinking analogy I have come up with is sort of like how the SS-7 layer in PTSN switching is the 'administrative layer' for voice phone systems. Well, in cloud computing there's an analogy. If the routing is done at the server location level, then it's extended grid computing maybe, but not pure cloud.
Make sense?
So now I can somewhat explain the concept to clients, and although my clients are small (mostly under $5 m) it's still worth asking - when selecting something like a project management platform for long-term deployment -- if this product which is assumed to be web/grid now is somehow get to a cloud in the future? --- Another way to visualize 'cloud' computing is to look at it as the communication network equivalent to FS-1045-FS-1051 ALE HF radio systems.
In radio system design, when you're trying to increase reliability, one of the first ways of accomplishing that was to use antenna diversity... which was later improved upon with advance multiple receivers using either analog AGC/AVC voting, or digital sample comparators.
In these systems, the decision which antenna (or receiver) is the analog to the content routers. But it was all centered on phone physical location.
In ALE, which is a frequency agile system, the order wire can function as a message store-and-forward to get a message to any node on the network. It can sort of work-around outages; ALE was designed to be a nuclear survivable radio network. Ergo, location-independence.
And that's why true 'cloud computing' is so important and why big companies (like IBM) are putting emphasis on it...because in an age of growing risk, there's a lot to be said for having key network infrastructure go location-independent because once that's done, the robustness of the system increases dramatically to the point where meaningful SLA's can be written without writing pages and pages of exclusions to account for terrorist attacks/miscellaneous uprisings, power outages, network outages, DNS server issues and yada yada yada...
The Blue fellow figures there will be huge IT savings. But, the way I figure it, even if it were a push, just the savings in Legal not having phonebook size SLA's would probably justify all development costs. ( ;-) )
I'll let' you know if 'up the food-chain' gives permission to share the PPT slides. The discussion of the .NET tariff comparison with cloud billing....well, let's just save that for another morning. Either that or I start the billing clock. ( ;-) ) But that's a better view of the cloud(s).
My Earlier Re:Marx Remember a while back I told you about a purported Karl Marx quote that I trashed as crap?
Seems Megan McArdle of The Atlantic has figured out it's "Marx Fraud" too.
My Re:Marx stand. --- Send snip and save items to george@ure.net --- end snip and save section ---
Thursday January 29, 2009 Belaboring Layoffs Before we get to the heart of this morning's report, let's start here: There's an interesting 'analysis' that showed up on the Financial Times site last night authored by billionaire investor George Soros. What caught my eye is the part where he wrote - after reviewing the development of the present financial mess - that:
Mr. Soros is welcome to his opinions and all, but here at the ranch, my view is that we "Wouldn't have a financial crisis in the first place, without excessive greed, excessive levering, excessive compensation plans, and all the rest. Reaping what you've sown, brother."
Sort of like Pappy's saying "You can't con an honest man who always does what's right", to assert that governments have a responsibility to save bankrupt institutions is a Constitutional blasphemy...one pardonable though, if you're rich.
Yes, there's supposed to be recourse to the government for savers who get stiffed (via FDIC, et all) but seems to me that all this crap I'm hearing from Wall Street is that renegotiating all those bundled loans would be a paperwork nightmare and how big institutions are too big to fail are nothing less than erudite whining and a shrill form of excusification - begging for more socializing of losses and privatizing of gains. Toughsky whatsky?
Global rescue plan talk? Sounds to me suspiciously close to the One World's club's wet dream of a global income tax to pay for it? Another nail in that summer of hell coffin, sounds like. --- So, while the stimulus plan - the latest $819 billion of your money - gets its rubber-stamping on Capital (sic) Hill the larger pattern is clear: The global elite's game is up - the global bubble of exploitation of working peoples and third world resources has arrived at the popping point, and the transformation of 2009 is going to be a lot worse than you're being told on the MSM which was once again yesterday explaining how at last 'the bottom is in'.
Oh, and now the elite all want to leave the table 'winners' not what they really are: Losers.
America, at the end of the year will still be here. But not in its current role as the playground for the Masters of the Universe types meeting in Davos. Things are changing and before even summer is out, you may see mail delivery cut to 5-days a week as outfits like the Post Office try to reel in their expense line. --- I told you in December 26 that I expected Boeing would lay off 10% of its workforce early in the new year. They just announced 10,000 would be cut - 6% of their workforce, after turning in a loss in Q4. And they are far from alone. Starbucks is closing 300-more locations and laying off 6,700 more folks.
And that gets us back to how the depth of the crisis is evolving. Let's look at the latest Mass Layoff report and the first thing we notice is this technical note:
So, after tearing apart the numbers, it becomes clear that the Labor Department just 'seasonally adjusted' another 55,408 people into unemployment during 2008 with the largest impact of these 'seasonal adjustments' coming in August when 14,996 folks were added. The only month where people weren't added was October where 2,138 fewer were reported.
And it all leaves us with a big picture of what an economy in 'train wreck mode' looks like:
And the layoffs continue. IBM has reportedly laid off 2,800 (or more) and cuts may continue.
What will bear watching is how the layoff and employment picture shakes out around the country. Montana, for example, could have a half percent positive growth for the year, but could just as easily go negative, but it's nothing - and damn near rollicking good times when compared wither states like California which runs out of money this weekend.
For now, reports the San Fernando Sun, even though the California unemployment fund has run out of money, the feds are sending enough dough to keep UI checks coming. But if you were expecting a state income tax refund, lotsa luck. You won't get an IOU - now it's morphing into a plain delay. --- You'll just have to pardon me for being a bit grumpy on this stuff. You saw where Russia, China Blame Woes on Capitalism at the World Economic Forum?
I don't expect anyone at Davos to blame transnational corporations which have superhuman rights compared to you and me. It's not in their interest to really solve anything - for the most part, it's just a juggling act to see which country can gain this small edge, or that. Cannibal corporatism. --- Marketing segmentation gone berserk: Now Germany is gong to set up a 'bad bank'... Is everyone on the planet crazy? Been clear for years what's coming though. --- Problem is, that until someone comes along with a way to reward 'right-sizing' and small footprint businesses, while at the same time, not going down the road of the corporate pharma giants which will find an illness for everyone given a chance, things aren't really going to change, except for the worse.
Which is why we're left with the task of reformulating things here at the grassroots level - to have our gardens and work on issues related to personal independence and personal competence in as many areas as we can find time for.,
To thing we're all going to be 'Saved!' by government is almost as foolish as expecting UFO's to show up and save us. Seems both are statistically improbable events. Kinda like that old phrase "employment security" - which is also being relegated to the scrapheap of social concepts.
The noise you hear around the world is the social fabric starting to tear. But I won't belabor that point any more - for today.
Hardly Durable Durable Goods report is out from the Census folks today:
The defense and non-defense numbers just bolster my contention that our current round of 'wars' is the only thing holding back another 5% or more unemployment which would put us at Depression (1) kind of rates.
There Goes January The 'as goes January, so goes the year' in the US stock market is not looking too good. The futures are down and I suppose in part it's because of Ford which los $5.9 billion in Q4. But, to their credit, they aren't going to the Nanny State trough...yet. From the Ford family:
Stick around a while.
Just two session to make 400 points. OMG this is so craps table at Vegas...except Vegas is way more honest.
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Coping: Beyond the Google Earth Debate People in India face the prospect of having Google Earth shut off because it was supposedly used by those terrorists a while back to plan their attacks. Good note on point from a reporter in Minneapolis who writes in The Hindu and quotes from The Guardian "It regularly comes as a surprise to people that our own infrastructure can be used against us." --- Since everything in the world is now crazy - it comes as no shock that the UK and Canada are cobbling up laws to make it illegal to photograph police. Yep, sure would be a terrorist act to roll video of a cop shooting an unarmed suspect in a subway, wouldn't it?
Cloud Computing Story From a reader:
Me either! Never could find a nag to bet on that was smart enough to read The Racing Form, either. Horses are just dumb, I reckon. But next to most politicians...
Watch the ASU Web Site Today Hear that later today Arizona State University may announce some furlough plans...we'll be clicking here this afternoon. Remember the part in the linguistics about 6-months back about higher ed crashing?
Rumor Only UNCONFIRMED AS GENUINE at this point - but here's a snip from a purported ASU email: sounds credible enough...
First of many, I'd reckon; sadly. --- Send snip and save items to george@ure.net --- end snip and save section ---
Around The Ranch: Adventures of Zeus This morning sometime after breakfast, feeding the goats, a hot shower, and more coffee, it's off to the vet's office to pick up Zeus...who had to go back in with his eye problem - which originally got started because of his wayward ways prior to getting his ZPG card punched - administered it seems by a feral female feline who was none to pleased with his lack of foreplay. He's a young guy - what can I say?
Don't know if you've ever had to put Cipro (ophthalmological drops) into a just recently feral cat's eyes, and then follow it up with a dab of atropine (to reduce pain and dilate things) but I can assure you that it's not the first thing you want to do in the morning.
Outlook is good - if he will just cooperate on his meds. Reminds me to call my tax guru today and see if care for a 'farm cat' is a legit ag expense. Local custom seems to be that things like dogs that perform a function - like keeping coyotes from goats or sheep, a donkey for the same purpose, or a dog that's a herder are considered farm expenses. Same thing with cats that keep down the local vermin/rodents - because that, in turn, keeps down the number of snakes about.
It'll be interesting to hear what he has to say about Zeus's request to have his own big screen. Don't think that one's gonna fly. Felt bad enough writing off the premium channels that the goats watch.
I'm just kidding of course - no audit please. It was for the chickens.
Ohm On the Range Speaking of strange thoughts and things: My big pipe into the internet (measured in MB's of bandwidth instead of KB's) has been acting up the past couple of days. Our microwave link provider figures it's water in the coax cable that comes down 300' from the top of their tower. But here's the interesting part: Doesn't act up until it warms up a bit, and since this morning's temps are down into the low 20's, the big pipe is working fine. So I'm writing furiously before the temps reach back above freezing.
All of which reminds me that even after 40+ years of commercial broadcast engineering, studio building, and ham radio work (extra class, and a Morse code-head, I'd add) I still have never measured the resistance of ice compared with water of the same cross-section/length in the unfrozen state. Let alone impedance over a wide-range sweep. Why does this basic science stuff get pushed down to the bottom of my to-do list?
Wednesday January 28, 2009 Fed Decision: Nothing Left to Give Since we're so close to "money for nothing" (get your chips for free), the high point of the Fed meeting decision out in the past few minutes has been talking points...
Of course the idea of buying Treasuries is laughable. A reader in California sums up how the financial world is now reduced to desperation and the playing of musical chairs, not just at the Fed level but for states too:
Yeah. Oh, did you see the Merrill Lynch note today that actually used the "D" word? The note from Merrill North American Economist David Rosenberg said in part in his note "Inconvenient Truths":
Hats off to Rosenberg for 'getting it".
The Fed is clearly worried about deflation, so expect more printing of paper - should be an interesting test of whether deflation can be 'printed over'. In the same sense that Russian Roulette is an 'interesting' exercise in statistics...
Peoplenomics Subscriber Note We now have our 'oil tanker grounding' which should put a temporal marker in the 'here comes Obama's test..." Date had been in the Jan 26 area in the predictive linguistics, but didn't happen until the 27th - close enough.
Global Trend: Barter Returns Quick: The world's oldest profession is what? No, not that aspect of it; the bartering aspect of it. That's the point this morning as we read how Russia, Malaysia, Vietnam, and other countries are resorting to barter or goods exchanges in order to make trade work since the usual media of exchange (money) is in extremely short supply of late.
Now, here's the problem in a nutshell: There is so much interest due in the world today, and so many derivatives in blow-up mode, that things are obviously going to continue in slow-motion collapse. But, the MainStreamMedia - worried more about ratings in the short-term, rather than survival of the country, seems to be covering the whole crisis ahead as though it's a fiction. Surprise! It ain't.
Nevertheless, that doesn't keep the GOP from saying that the stimulus bill contains too much spending. Which is bullshit on its face, since the Greedy Old Party members were the primary architects who stuck the country with this POS economy, helped along the bumpy road to financial hell by bankster lobbyists and What's his name who was asleep at the wheel at the SEC (derivative oversight? Duh...) and do I need to remind you that Housing Bubbler Easy Al gets some due here, too?
Even the Boyz (and Girlz) in Davos are hearing what's described as a 'dim outlook' in some reports.
What we have, however in the very short term (days) is the market is still going along with the delusional belief that "everything will work out fine" - which of course, it won't.
What the Fed will be jawboning in their announcement this afternoon will be "new tools" to help the economy. Like there are any 'new tools' among economists? You either print more money, or you don't is what it comes down to. I looked through Fed Head Ben's essays on the depression again last night, because there's this wild preoccupation among monetarists that there's got to be a secret formula for economic growth in the study of money by itself.
Which is foolishness, at its core. There's something called the innovation cycle which is measured by things like patents and technology rates of change. You can study it all you want in Cesar Marchetti's S-curves work. Plain as day: Tractors replace farm animals in the 1920's and the economic dynamic changes catching everyone off guard.
If there are two really ways to balance off the pure monetarist perspective, I'd offer Robert T. Ely's book "Hard Times: The Way In, the Way Out" which I didn't notice being mentioned in Bernanke's book, and pretty much anything by Cesare Marchetti, whose work on replacement of systems over time is in my view second-to-none. An example of Marchetti's larger view:
The point I'm getting to here is this:
When it comes to economics, there are macro economists who seem to believe that monetary policy is 'the big lever'. After oh, about 30-years of study, I concluded that no, the other side of the equation innovation, replacement of technologies, breakthroughs in physics - like the transistor - might just have a little something to do with how life works out.
Just as government's answer for all ills is "More government!" - invariably accompanied by the softly whispered (more taxes, too), so too, the bankjackers who masquerade as 'monetarists' universally miss the point that printing up 'money' is simply theft of purchasing power from people who already hold paper in the main.
So, unless the Fed comes out today and says something about funding fundamental research - something like Japan did with its Ministry or International Trade and Industry, we are all hopelessly screwed. A long, slow screw, but a screw nonetheless.
If you want a really clear view of America's future, go look up the real savings rate (before the Fed's jiggering a couple of years back) and then look at patent filings and agricultural production rates. Throw in jobs offshored and an analysis of how multinational corporations skate on most taxes and play the wage-rate differential between countries.
Then ask yourself this one: Is anything looking better?
As of this morning, I sure don't see much and I'm not holding my breath on the Fedspeak later today although the market futures are in super-hype mode so a 300-point rally based on prayer and the stimulus vote seems to be in the offing.
But the real deal as I see it is that the PowersThatBe are deathly afraid of the old Wall Street saying "As goes January, so goes the year." Since 2008 ended at 8,776.39, and we've only got now through Friday to make up a little over 600-points, and convince you to stay with that crashing 401(k) a little longer, today's rally (at least till the Fedspeak begins) oughta be a marvel to behold.
Old Wall Street sayings get to be old sayings by being right most of the time.
With this in mind, here's another one I remember: "Sell into strength." Which is what I'd be doing as we approach the 2008 close -- that is, if I were foolish enough to still be in paper assets.
So instead of watching MSM's crap, go read the FDIC's draft of "Processing of Deposit Accounts in the Event of an Insured Depository Institution Failure." You need to read the background:
To my way of thinking, this is critically important stuff to know...unless you're a lobbyist, in which case the new Geithner rules on lobbying are worth a read. After all, with (another) 23 banks being 'partly' federalized, for $386-billion, you'll have more work to do... A shorter report than usual this morning due to my main internet pipe being down and besides, if you just want to hear news headlines, you can read about Israeli warplanes hitting 'Hamas tunnels' elsewhere. Or to hear about our ice storms. But even in Russia, the headlines include items now like "Millionaire's Crisis Plan: Returning to Barter." --- snip and save section ---
Coping: Memeering Alert: Bad Rapping Marx Got an email with a very interesting quote in it this morning...the quote was this:
Sound reasonable? Not to me, so I sent this back to my source:
Also of note, Marx never used the word bank in this version of the Community Manifesto, either. But alas, no use of the word "technology" in that one, either. Nor, does it show up in the 1926 translation of "Selected Essays".
So why clutter up your morning with this kind of note? Because...
This is memeering! Call the forensic linguists - quick! Let's do some trace-back work, huh?
Yes, that's right...this is the kind of 'preserve the present paradigm' stuff that attempts to discredit some ideas which are not convenient for the PowersThatBe...because if someone actually saw through the smoke, they might figure out that what happened to Russia was largely a Western/PTB run 'revolution' designed to exploit Russia - not to mention have a ready 'enemy' at hand, so that the smaller-minded of the worker bees would 'stay in line' and not challenge the 'authority' - a progenitor of sorts to the present-day War on Terror, which since the fall of (what wasn't really) communism has become the latest control mechanism. But even most at Davos haven't figured this out, because not even being in the Elites make you an Insider, right?
There. I feel a lot better now that I've got that off my chest. ---- Don't get me started on how the folks that wear crowns go about trying to discourage anyone else from experimenting with metal shielding/hyper-dimensional geometries around their heads and are doing everything they can to cast a pall (memeering) on those who 'wear tinfoil hats' either. Remember who started this metal crown' stuff and what they've done with it.
Things Aren't Bad - Yet Another reader sent in this:
Well, you gotta blame Cliff at HalfPastHuman for getting the date right - I just report. Still, it's a good call...maybe not as spot on as the China Wedding Quake call back in early May '08, but how many 'better than chance' calls does it take to establish there's a new science here?
Unfortunately, things are not bad yet. I saw a Bloomberg headline a few minutes ago that someone at AIG is saying the "Worst isn't behind us" and I'd have to agree. The social contract is about to be substantially rewritten globally and that's the stuff which revolutions are made of. Hope not, of course, but already there is 'advance memeering'. --- A longer column tomorrow if the big pipe is back up... --- Send snip and save items to george@ure.net --- end snip and save section ---
Retirement Dream: Escape to the Sea - A Good Idea? The arrival of an email this week about a group planning to do something called 'seasteading' - setting up whole new countries on the high seas, reminded me that I've never tried to summarize my experiences having lived on a 40-foot sailboat on the US West Coast for a bit more than 10-years, although there's plenty of learning to share from the experience. Although there may be something to be considered in the possibility of a 'global coastal event', there's a lot to be had from such a lifestyle...enough so that I could write a longish book on the topic, so pardon this week's report being a bit longish compared to most. Why, the subject of placards alone covers plenty of territory; everything from the sign that "Marriages performed by the Captain are only valid for this weekend" to the more serious (and required on vessels >40') MARPOL compliance placard not to mention the various oil pollution and disposal plaques. So pull up a long glass, me hearty - we're going boating, arghhh. Like other big decisions in life, it's a matter of trade-offs. Hate boating? See the earthquake discussion toward the end...
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"Live on $10,000" Updated What? You haven't ordered the ebook "How to Live on $10,000 a year -- or 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 or, click one of the following button:
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!)
Tuesday January 27, 2009 For Whom the Ax Falls Since I'm not really big into saying "I told you so" it would be inappropriate for me to point back to my December 17th column (archived here) where I wrote:
But, since the headlines are now coming in that fit, even the most skeptical of readers may consider that our view on the future is sometimes clearer than what's served up as "news" in the MainStreamMedia.
Particularly significant was the Financial Times headline that "Gloom deepens as 76,000 jobs go in a day" and the Calgary Herald's assessment that on "Black Monday: 70,000 jobs vanish." Why can't anyone besides me call it "The Second Depression" yet?
Curiously, in Scotland, Monday was counted as 69,000 jobs, while in Ireland it was counted as "more than 100,000 cuts". Plus, there was the report in the LA Times putting the number at 60,000.
All of this brings me to wondering why all the different numbers?
I have a couple of suspicions. Perhaps the Irish count is high from one too many Irish whiskeys leading to some double counting - a forgivable sin, of course, while the California number may be low because of the quality of California's students...or is that a curriculum issue?.
No matter how you dice it, Monday's was a big number. But that's not my point this morning.
What I get refocused on is how long will US paper money be able to hang together in the face of global currency manipulations and job losses at Monday's rate?
One way to ball-park the answer might be this: Take the total number of folks axed on Monday in the US (we'll use the LA Times number because it was low) and divide that into the US workforce.
To get the US workforce numbers, we refer to the Labor Department's Employment Situation report for last month which guesses the workforce around 154.447-million.
Then we divided 60,000 into that - and that tells us that we have just a bit more than 7-years before everyone in America would be unemployed at the current rate of job loss.
There, don't you feel better? --- Well not quite: Things don't work that way in real life. Reality suggests that since there will be a huge multiplier effect in the service industry from the loss of primary jobs, that we could see a half-life of less than a year. That's because, as I explained in a December, 2000 note (One Over Virtuous Cycle), the grim reaper of jobs in depressions rotates through the economy:
Well, how about that? My planning back then has come to pass by and large, and after spending several very happy years in higher ed, I'm busily working as a consultant helping companies 'get through' to the other side of what's now just starting to dawn on most people. The curse of living a couple of years in the future, eh? --- What makes this Depression different from the last one - and much different from what's in Ben Bernanke's book about the 1930's event - is that there have been huge structural changes that impact how this one is playing out.
For example, it became clear to me several years back when I was still a higher education executive that at some point the highly levered higher education system would have to be cut down to size - just like everything else. Not only had the predictive linguistics from the HalfPastHuman folks been saying "Parents: Get ready for kids returning to the nest" or words to that effect, but it was also clear that there would be an increasing number of students unwilling to take on student loan burdens because of concerns about their ability to pay off their student loans.
Sure enough, an article out of Scotland notices that "Students pick poverty over getting in debt"
While you'll occasionally see headlines like "Scholarships Go Begging" most of higher education has - like everything else in the country - been highly leveraged because of what had been the previous 'easy money' in student loans and grants. That there were abuses can't be denied, but in fairness, the stories of student loan abuse figuring into things like "300 ID thefts" is met with sincere enforcement efforts by school administrators. --- Something I expect we'll be seeing a ramp-up on over the coming months will be the low-intensity conflict between private higher ed and state-funded higher ed.
On the state-side, while it's true that cost per student clock hour may be low in some cases, the private higher ed outfits do pay taxes on their property. Any fair assessment of private-versus-public higher ed is incomplete without looking at total cost (including lost tax revenues) from all those non-revenue producing state campus grounds and buildings. Did I mention retirement liability?
On the other hand, it's almost magical how private college costs escalate just as fast as available funding from the Pell Grant, PLUS, and Stafford loan programs. Sheer magic.
Stories like "All students should apply to receive aid for college" may sound helpful, but at one level stories like this could be read as a marketing piece for the existing higher ed paradigm; The implied message being "Please consume more higher education." --- One of my better insights into how life really works has been the realization that most of the time, people won't pay for what you know - they will pay you for what you can do for them.
While there are plenty of schools offering media and recording arts programs, the falling cost of equipment and changing technology - not to mention huge student loan bills - might give potential students cause to rethink those career choices. More and more music is coming from home studios, inexpensive software can capture even cell-phone videos, and graphics designers sure notice big media companies reporting declining print ad sales. McGram-Hill is a well run company but look at what they reported:
Do you think fewer ad pages could be tough on the graphics department?
So, what does this coming battle between the private and public higher ed folks over what's there in the federal budget mean? I mean besides war between the factions as the public's tout their lower costs (looked at in only one way) versus the privates saying, at least on the vocational side, "Hey, we at least have placement accountability compared to the community colleges..."?
It means that anyone who likes to eat three squares a day ought to be thinking now about where the jobs will be going forward. I'd be trying to stay on top of any infrastructure renovation talk coming out of Washington, and lacking something appealing there, I'd be looking the jobs which would be very last to be laid off as governments go broke, the result of failing pensions, collapsing purchasing power, and budgetary madness.
If you think I'm pointing to California which goes to IOU's next week even for things like welfare checks, gee, yah think?
Of all the people I know in various jobs, I figure my EMT son doing work for a funeral home in the Pacific Northwest is well positioned. He loves medicine, is continuing his education (wants to get on the national registry....) and as he's got it figured, it will be last remnants of government before they let dead people pile up around town. Fire, police, and public health, may indeed, become a higher priority than funding infotainment schools.
As the screws get tighter on government budgets, the line between 'nice to have' and 'got to have' ought to become clearer. But, with more days like Monday looking probable in our near-term future, continued focus on how to be in one of those "got to have" jobs, rather than one of those 'nice to have' jobs might save you from becoming one of those "For Whom the Ax Falls."
Geithner's Rules Now that he's Treasury Secretary Tim Geithner is putting out new rules which will restrict how much influence special interest groups can have on how funding for banks and such goes.
At least that's the theory. In reality, such rules are usually only a short time in the hands of lawyers before a wiggle hole is found and business gets back to business as usual. Ah, but it is such good theater, isn't it?
And, of course, it continues inexcusable that with calls running over 100:1 against the bailout of the banksters from constituents, CONgress let this fly-by-night plan go through...but that's a two beer discussion and that wouldn't be right. I have a dental appointment this morning...
Japan Outdoes Pelosi If you're awake enough to remember the Nancy Pelosi story about how birth control would be good for the economy, here's a curious counterpoint: In Japan, "Workers urged: Go home and multiply."
Sex wars? Russia is also fighting a demographic time bomb in their workforce.
No problem for a California mother of six boys and two girls this week. Yup, 8 kids at once.....
Flu Flew A 6th reported death from bird flu in China. Not a bird-demic - yet. --- In a moment of mercy I didn't haul out my other headline which would have been "Bird Flu Not Cheep."...saving that one for a pandemic flu costs story...
There's That Word Last year our predictive linguistics pals said 2009's one word descriptor would be "transformation." Now I notice that:
Well, gosh, who would have thought? I mean, besides us, telling you about transformation being the key to getting through 2009 in...oh...May of last year? And the folks in Davos think they're the "Masters of the Universe?"
Ooops...shouldn't say that...not a fair comparison. There are, after all, three of us. Besides, we're not as invested in any particular outcome like many Davos attendees...
--- snip and save section --- Coping: Reworking The Independence Journal Time once again to solicit a little 'reader input' from you. Let me explain the situation:
As you may be aware, the UrbanSurvival.com daily report is made available on a completely different server/location as a back-up in the event that Urban is blocked by some companies/net censors, and such, on a site I maintain called www.independencejournal.com.
I had been experimenting with having more or less 'live' RSS feeds aggregated there on the home/index page, but that has been less than successful. So that leaves me with a good domain name, plenty of bandwidth and nothing to do with it. So I've been thinking about what would be a good 'retasking' of the site. Here are some of the ideas I've come up with:
There are plenty of other good ideas around - most wouldn't take too much work. I'm n ot trying to find ways to fill my day with more work, but it seems to me that it's important to keep an eye on "service" to fellow humans. UrbanSurvival is doing just fine and the few subscribers to Peoplenomics keep the lights on for all three servers.
So with that as background, any thoughts on what's 'missing' on the net would be appreciated - and as they come in we might kick them around a bit. Click here to send in ideas, comments and suggestions, or simply send to george@ure.net - thanks!
More Government Department As New York considers taxi a fare-sharing program, I find myself wondering is there any limit at all on how extensive or intrusive government can become? No? Didn't think so...
Crimes of Opportunity The report that "Hispanic illegal immigrants hit by wave of robberies in US" leaves me with mixed feelings. On the one hand, they might not be targeted if they were here legally, but on the other, robbery is still stealing from another human and that's wrong... Steal is still stealing, though.
NASA's Rocks & Hard Spot Here's an interesting little problem for the PowersThatBe: The Brits are holding an alleged computer hacker, Gary McKinnon while the US is trying to get him extradited to the USA to stand trial for snooping in government computers.
But here's the problem: Apparently, McKinnon says that NASA has been retouching/disposing of pictures that would confirm UFO's as real.
Taco Bill? Taco Bell has to pay up $42 million for underpaying the creators of that Chihuahua campaign, says a federal appeals court.. Dog Eat Dog World, huh? --- Send snip and save items to george@ure.net --- end snip and save section ---
Around The Ranch: Ah, Gassed I become royal again today with the installation of more 'portable gold' in my mouth. Another one of life's 'crowing achievements'. Not planning to get any more for a while, so hedge your gold plays accordingly. Still, gold from down $11 overnight to almost even, a rally by the time I start check writing can't be ruled out.
Monday January 26, 2009 Guess Who's Coming to Dinner? Unless you happened to own a whole pile of Wyeth, which is being picked up by Pfizer for a little over $50 a share, about the most notable economic story this week is likely to be either the Fed meetings where the issue of "What's better than zero interest?" is bound to come up, or the Geithner as Treasury Secretary vote which comes probably this afternoon. Third choice? Davos Masters of the Universe meetings.
Less manic participants in the global economic meltdown, who've seen it all coming when it was way up the tracks, are able to sit back staring at just another winter Monday and watch the larger issues:
But, if all of this seems like it could touch off social rebellion against the current consumer paradigm, you ain't seen nothing yet. Later this spring, social pressures will leap upwards when either Baby Boomers find their life's savings will be destroyed by pernicious inflation - but what did you expect from the money-printing party since last summer? - or they will find the stock market continuing to crash, dividends disappearing, and 40-years of scrimping shot to hell. More likely: both.
So, my advice to the Fed is really simple: Don't worry that tax cuts expiring are going to slam into corporate profits this year - a sort of 'eff-you' from those loveable right-wingers, who secretly are working hand-in-hand with the democorps to defend where the old paradigm was going (toward more socialism).
Nossir, instead, replay the same old mantra and hope that 'reg'lar' folks keep snoozing through reports like "House prices dropped in 70% of US States in 2008" says a report from First American CoreLogic, and maybe they won't notice the other cornerstone Baby Boomer life savings have been stolen by economics-challenged leadership clinging to a system that has destroyed 95% of the dollar's purchasing power since the Federal Reserve (which is really neither) bankjacked the Constitutional money creation role from Congress back in 1913.
The result has been a quiet round of justification of 'inflation targeting'; something akin to tacit agreement among the rich on how fast the elite want to steal purchasing power from the poor. --- Rank and file humans, of the sort that make $2/day won't be adequately represented as the World Economic Forum meets in Davos starting Wednesday, of course. But over the next couple of years things will likely change if the longer range linguistics are right. If you listen really closely and read the small stories that don't dominate MainStreamMedia, you'll occasionally hear the poor folks just trying to get by. Labeled 'pirates' if in Somalia, street thugs in Greece, Islamic militants in the streets of France, or revolutionaries or financial terrorists, or money launderers if in Iceland.
So I'd advise the Fed tell a few jokes, talk about innovation and change, pump up confidence best they can, and get it over with quickly, so the Masters of the Universe can fly off to Davos to plot their continued dominance & control of the old economic paradigm. I expect the meetings to be followed with usual self-congratulatory remarks and more of those mighty pricey dinners; tabs for which will be many times half of humanity's annual incomes.
But set an extra place at the dinner table come 2010 or 2011. Guess who's coming to dinner.
"Do As I Say, Not As I Do" Department Not that you need further proof of the duplicitous nature of politicos, but you did catch the Drudge Report headline that Nancy "Pelosi says Birth Control will help economy"?
We are soooo screwed. Or not, as the case may be.
Fat Chance A report out of the UK says a virus that causes cells to multiply has been isolated and may have a link to obesity. And here all this time I thought obesity was caused by eating too much. Silly me.
Cause and Effect Department, II As long as we're talking about 'causes and effects' I trust you saw the report out this weekend that "Two ex-Guantanamo inmates appear in Al-Qaeda video".
Let me just ask, hypothetically here, what you'd do if you were flown to a foreign country, perhaps waterboarded, and following your release, someone came along with a video camera once you were out and asked "Have a few words for us?"
Another One Bites the Dust Forgot to mention in the Saturday report that another bank failed last week. Ho-hum these days, as it wasn't one of the Tier One sort, but worth mentioning that we're in ramp-up mode.
--- snip and save section --- Coping: Cloud Computing I've got a couple of consulting clients that are really taken with using http://docs.google.com - Google's online spreadsheet and word processor because it allows everyone in their organization to be able to share information. This has been up for a fair spell now, so it comes as no surprise to read that "Google plans to make PCs history" in the headlines.
An interesting concept, but not really new. Back when some of us 'old-timers' started typing into 'dumb terminals' it was the only way to get at a computer...back in the days before the Commodore 64 and the TRS 80's.
In the early going, cloud computing was the only available option. Back in the days of phone lines, hosts, and 300-baud modems.
To be sure, it could be argued that cloud computing has its place - as long as you trust the cloud. While Google is a completely trustworthy outfit, in my view, I still wonder how 'safe' is data from other prying eyes -- official and hackers.
For now, cloud computing is a convenience and a neat online service - like Webex and such. Cool ways to share information but will they ever replace the heavy iron under the desk?
Likely not. Seems to me 'cloud computing' is going to be one of those IBM-PC versus Mac kind of questions; each side has a part of the truth.
Speaking of Hacks Did you read "Credit Card Hackers Find New, Rich Targets" on the MSNBC site? Seems by the comments that more and more folks are rediscovering cash. Kinda hard to hack a $20, isn't it?
Ethanol - Madness? If you were wondering about how really green ethanol fuels are, here's an eye popper quote for you from "A "Green Tsunami" in Brazil: The High Price of Clean, Cheap Ethanol":: Hold it! Made by slaves? Ruins the ability of folks to store fuel? Hell, this stuff is a corporate wet dream! Fund it! Lobby it! (Where's my morning shot of El Don? I need to amp up my Kapitalist mindset...jahwohl!)
End of the World from Left Field Don't know if you've put many brain cells to work on this one, but go read the article titled "Natural Cause For West Antarctica's Warming?" and then think through what a Mount St. Helens (or larger) eruption going off under the Antarctic could do to life as we know it. One of my strategic planning friends summed it up as simply 'U/I" - his shorthand for "unimaginable".
BTW: The satellite imagery off the Chilean volcano is damn interesting, but may not be enough to relive pressures down under down under, so to speak.
Echoes of Depression Past Reader sent this:
Eerily like "Good times are just ahead..." from the last Depression, isn't it? And they were...a mere 20-years ahead. --- Send snip and save items to george@ure.net ---end snip and save section ---
Around the Ranch: Good Kitty, Bad Kitty When I took our black cat Zeus to the vet last week, to have a scratched eye looked at, and get his ZPG membership completed, I was advised by the vet's staff that out of all the cats they'd ever seen, Zeus was among the most cantankerous. He goes in for a recheck today (eye is healing very slowly). Seems I may have to rename him a pit cat.
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.
So one of our charts for Peoplenomics subscribers oughta be widely circulated - it shows that if you line up the peak of the Dow in January 2000 with the peak in early September of 1929, we're on a very very close replay track. Much closer than even the chart shows if you were to back out inflation, and put in the effects of 1929 deflation, but that'd be real work, and I'm sort of lazy if the truth be told.
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:
"George, that's only a coincidence!" your monkey-mind will protest.
Why sure it is...you bet. A 9½ year long coincidence...yessir....just a coincidence, I'm sure...
Write when you get rich,
George Ure, The People's Economist |
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but it's early and not enough caffeine buzz yet to go making
wild assertions.
