- Friday about 8 AM Central Time Except Holidays....many major
typos are fixed by 8:30 daily
March 7, 2009
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A Cats-Eye View of This
My name is Zeus. Fleaster's the last name, and I'm gonna
teach you a little bit about investing today since George, the
overweight biped who normally writes a Saturday column here
about investing, decided to sleep in and even though I've barely
got my eyes open, I think I can out-write that half-wit any day.
Not to brag, but I'm a published author, too, in my own right,
having crafted a whole series for Mousing Monthly about
different ways to get humans to respond to cat tricks. Or,
maybe you saw my series in "The Rat Reporter" on "Field
meowing for fertile felines". No? My "Hydroponics
for better 'Nip"?
You've really got to expand your horizons because if you don't,
you'll keep getting the same results you've been getting with
your portfolio which I figure aren't good.
By way of explaining what I do around George's ranch, I've
convinced him (and the much cuter blonde chick who's more
generous with the wet cat food) that I am a mouser. That's
not exactly true. Just like most folks around your
human water coolers think of themselves as Junior
Buffetts, when it comes down to actually pouncing on that deal
of a lifetime, or even something simple as taking a little bird
off the table, most humans can't do it. I don't like
mousing any more than you like going to a cube, but that's the
deal. A mouse or a lizard once in a while and the rest of
the time it's dry food and wet food....cool deal...
Here's some catly advice: Think of investing like mousing:
You ever notice how we cats will sit back for a while and eye
our prey? I mean really sit back. Why just this
week, I sat up by the garden for nearly an hour before a
suitable bug wandered by. It was a grasshopper - one of
the first of this season - and it was delicious. We cats
call 'em the shrimp of East Texas. Very tasty. You ever
that patient when you trade? Doubt it.
My point? You wonder what my point is? A cat has the
good sense to stay in the now: we look for a good spot to
go hunting and then we patiently sit and wait. Eventually,
something becomes irresistible and we go for it.
Which gets me to why I've been watching the auto stocks.
You see, while the new guy in the White House has been saying
that he will
"do all that's necessary" to boost the economy, the way I
have it figured is there really may be too much capacity in the
auto making business. I'm presently thinking that as soon
as one or two of the majors go into bankruptcy, I might do one
of my legendary pounces on a few thousand shares of survivors
which I figure will beat the average penny stock over time.
I trust you noted the headlines about
GM's auditors raising the question whether GM would be able to
The fat guy, who I usually watch do the writing of this column
from my chair which is next to his in the office here, thinks
that's a bad strategy. The way he's got it sniffed out, as
soon as there's a couple of failures in the auto industry, and
we get that expected story about gold bar's not being pure gold,
he thinks he'll be able to slam another couple of gold coins for
under $700 an ounce.
That may be, and all, but as a cat that just not very
exciting. See, cats like me want some real excitement
in life. Like the time I chased off a skunk and didn't get
sprayed. That was exciting. Probably the
closest thing in human terms would be car racing, skydiving, or
flying aerobatics. If I'm going to get into a
position, I want it to be something that will be a sure-fire
winner over time, but exciting, too.
Now think about this: What are the barriers to starting up
a new software company? Essentially none. I
started one up a while back (don't tell George) and I run it via
email. I've got three programmers in Estonia, the whole
thing is built on C libraries which are dirt cheap anymore, and
when we come out with our new killer ap for the Siamese vertical
market (it's a lap recorder for cats-that-swim ap) we ought to
make a bloody fortune.
The internet has caused a massive displacement in
barriers to entry for all kinds of businesses - and that's what
George is writing up with more details for Peoplenomics
subscribers this weekend. But I snuck a look at some of
his notes on Friday and you know what? He may be onto
Barrier to starting up a new automaker for the next 10-years or
longer are immense. I don't think there will be any other
than the boutique high end outfits like
which don't cat-ter (sic) to the broader market. So given
the barriers to entry, and the idea that automakers are a
manufacturing platform that could likely be adapted to any new
technology that comes along like those 'new electrics' that have
been mentioned in past
www.halfpasthuman.com ALTA reports, I think there's some
value there. So please, keep shorting them and lets drive
a couple out of business to boost the value in the survivors.
At some point, jobs are going to come back to America and when
they do, I am going to be in the cat-bird seat, if you know what
You saw this week that
IRS dumped private debt collectors? Wonder if the
private outfits were trying to outsource tax collecting on
Americans to outfits in India? What a post-child for
globalism, huh? I mean the delicious irony of having
one-time colonial subjects collecting taxes on one-time
colonists, it just strikes me as humorous.
I'm not going to write too much today. Cats like me aren't
too good at typing, but I promise to use the spell-checker,
something I've never seen used in the regular weekly column by
whats-his-name...the guy who's chintzy when it comes to wet food
who needs a bigger lap, if you know what I'm saying?
OK, let me wrap up my human writing debut with what I think I'll
call "Zeus Fleaster's Saturday Rat Report". I'll click
through a bunch of stories where I smell a rat and then let you
sniff around a bit and see if you can't smell one, too, OK?
Rat #1: National Healthcare Hype:
You humans, like well-fed cats, can last probably 10-20 years
longer than average lifespans if you'd just get back to basic,
organic, relatively low processed food. But instead of
focusing on the problems that lead to healthcare issues,
you dumb humans are working on the wrong end of the problem.
You're trying to cobble up a money solution to something
that is fundamentally an education and habit change
you're too lazy to make.
Think I, Mr. Zeus Fleaster, am wrong? Go read the story in
the Nashville Business Journal headlined "National
HealthCare profits drop 76% in 4Q".
The way I have it figured goes something like this:
Healthcare is a purrrrfect shopkeeper economy model:
Everyone can work in healthcare, costs can go anywhere, and a
lot of it is taxable for the feds. So as the economy
implodes, here's the plan:
healthcare insurance mandatory. Since you taxpayers
already own an insurance company with lots of infrastructure
(AIG, remember them?) why not use them as the billing and
ERP platform for national healthcare? Shut down their
derivatives desks and let those guys set healthcare premiums
- there's about the same amount of money to be raked either
once mandatory healthcare is in place, have the federal
government buy up the healthcare providers that aren't doing
well. See, the banks are just a model - prototyping if
you will - for rolling everything BIG into a socialist
economy. Stealth collectivization...a sort of Wall
Street and Madison Avenue meet Joe Stalin kinda thing.
Congressman Roy Blount is drawing parallels between national
healthcare and IRS, don't let that bother you none.
The way I have it figured is simple: The sociocrats will
keep thrashing and trashing the economy (and the automakers)
until they can roll in a national healthcare plan which - like
the banks - will keep the profitable companies in private hands
and which will take the dogs (and you know my feelings on dogs,
right?) and sick'em onto the public.
And if crashing the banks and the automakers doesn't do it, I
look for the airlines to be the next big things to be
semi-nationalized after that.
I don't know about you, but since I'm a cat, I think I smell a
Rat #2: Hugo Chavez:
You saw the headline this morning over on the Drudge Report that
on Obama to follow the path of socialism"?
Follow? My whiskers! He's out there blazing
the path. Doesn't Hugo read any of the reports on the
White House is seeking economic advice from Twitter?
You mean like responding to the needs of a target market?
waste a good crisis, Clinton says on Climate" reminds me
that we cats can't be herded. You humans on the other
hand...well, it's a joke.
The report that "CBS
may have to borrow to pay off maturing debt" sure reads like
a third-part harmony to Fed buying Treasury securities.
Does it take a cat to point out that borrowing to pay debt is
not really paying down debt?
How'd you like that last minute save of the Dow Friday to keep
it from getting a 65-handle in the final minutes? Slick,
huh? And that
150 points in 35 minutes? Faster than one of the
jackrabbits around here.
I'd enjoy further elucidating and catatations, but I've gotta
get this uploaded and get out off this computer. It's
Saturday and I hear Tubbo has the milling machine going out in
the shop and if he sees me on his computer again, he'll probably
get mad. He hasn't gotten over my ordering 25-pounds of
catnip off Amazon a couple of months ago. Grouchy humans.
So I'm gonna go 'nip up' and keep an eye on my human servants.
See ya again one of these weekends when the wet food cheapskate
sleeps in...been real.
Oh, don't forget to 'spring ahead' tomorrow - why you silly
humans can't run by nature's clock is more mysterious than
grasshopper jump timing. The mice don't care what your
clock says and neither to I...tide comes in on schedule without
any 'correcting' and all that - looks like you're odd man out,
huh? You humans have to make up clocks which were
only ever good for finding the longitude. Since you
already should know where you are, what do you really
need a clock for except to make you feel perpetually late? From
a cat-level view, since you don't understand even the real
purpose of clocks, it explains how so many of you people could
be screwed in your derivatives blow-up, I guess, doesn't it?
You obviously had a different set of bedtime stories than we
cats get. Like this classic:
when your hungry
when you can
in the moment
much better plan..
By my mark: Z
That Other Problem in 2012
Lots of readers enjoyed Peoplenomics Issue
Steely-eyed Survey of 2012 Prospects") of 2/15/2009. However,
after doing a lot more chart work, it turns out that one of my threats
for that period may have a little more 'going for it' than I early
figured. But even more interesting is the related chart work which
I was doing at the time that may give some additional insight into just
where present market trends could be taking us. Before we get into
that, let's first step back and look at where we are in the Kondratiev
economic Long Wave and see how Kondratiev might be improved upon...
But first we have received this important warning about gold...
What is better than a
Christmas New Years
Why, sending an email to everyone in your 'contact' file and
tell them about
www.urbansurvival.com of course!
"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
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.
week's report is here. For
back issues of this site, click here. (Goes back to
Friday March 6, 2009
I'm Still Waiting for
Who was Vice President Thomas R. Marshall? He was Woodrow
Wilson's Vice President from 1913 through 1921. We begin
with this little dollop of history:
is best known for a phrase he introduced to the American
lexicon. During a Senate debate in 1917, a particularly
bellicose Senator catalogued what he felt the country
needed: "What this country needs is more of this; what this
country needs is more of that." Marshall leaned over to a
clerk and quipped, "What this country needs is a really good
I mention this little historical footnote because in much the
same way, I reckon "What this country news is a really good bout
You see, in the study of markets, you don't have a meaningful
(meaning tradable so I can make some dough) bottom in the
markets until you get capitulation. And despite the
market dropping 281 points on Thursday, there was no sign of
Oh, sure, there are some worrywarts out there like me...and even
the Drudge Report's
lead headline earlier this morning was about how the FDIC is
going to get
an emergency $500-billion dollar loan to remain
solvent. But that, unfortunately, is nowhere near
the level of panic that we need to put in a real market
I suspect that the editor at Drudge Report (or
is coming to the conclusion that something awful is amiss with
all these economic plans, which have not yet saved many houses
and which have not stemmed the financial market debacle.
Of course, the sad truth, as I've been writing about since 1995,
is that this really is the Second (or Greater) Depression
and one of the hallmarks of such an event is a state of denial
and the ever optimistic mantra. In the present moment it's
a president promising "change" and in the 1929-1941 forerunner
event, it was "Good times are just ahead."
It's only when the PowersThatBe realize that they have shot
their whole economic wad and their financial fix-it toolkit is
empty that something akin to real panic sets in. Of
course, we have been able to avoid that largely due to the
make-work wars of 'liberation' which although they sound like
pre WW II Germany in a certain sense, they have also kept a lot
more people from showing up in unemployment numbers...which we
will get to in a second. Let us not overlook giving credit
to Housing Bubblemeister Al Greenspan, too, for helping to
orchestrate the Housing Bubble, nor should we overlook the
republicorps who passed up that Gramm-backed end of the
Glass-Steagall act, which complicitous Bill Clinton signed,
which enabled the Banks to remodel themselves as Casinos.
Of course, now that their gambling losses are becoming clear,
it's you and me that are expected to pay the bill, but
it's only what passes for money...paper with symbols on it.
And how important are zeroes anyway? Shoot, bubba, I've
got me a gen-u-ine Zimbabwe Agro-Cheque for Z$100-billion
Zimbabwe dollars on my wall. I look at it on mornings like
this and wonder how the West can make such fun of Robert Mugabe,
who simply started adding zeroes sooner than we did...
What we should be doing is sending errant bankers to Gamblers
Anonymous, or better, jail. The Swiss - in many ways
smarter about money - actually do that (jail bankers who fail).
A reader who sent me a like to a blog which asked "What's
Dead? (Short answer: all of it). The article then goes
on to list pension funds (public and private), annuities,
FDIC, federal debt costs, tax receipts, tax-deferred accounts,
and any company with appreciable debt outstanding. The
reader noted that if the author of this way anywhere near right,
we are all sooo screwed.
Which we are, but let's not get ahead of ourselves...there's
still hope because a few folks, like Joseph Stiglitz (as
noted in yesterday's column) really do 'get
Not everyone is a loser in this market, however. We
note that "36
South Plans Inflation Hedge Fund After 236% Black Swan Gain."
A goodly number of reader of this site are also doing OK, having
decided to flee paper assets about the time I did. And
credit where due, a lot of others have seen it coming too,
including CNBC's Jim Cramer who advised folks prior to the
October mini-melt that if they needed money over the next five
years, they should be out of stocks. Good advice it was.
If you're a new reader, sorry about the losses on the house,
401(k), et al. Not my doing though. I have asked
readers to pass on this site to friends, but maybe you didn't
hear about this site sooner because so many readers of this site
have few friends. I mean when you think about it, most of
my friends who were playing the high-stakes house-flipping game
in places like Florida, wrote me off as a nutjob when I
suggested in 2002 that 'this wasn't gonna end pretty.'
In retrospect, the only thing I'm guilty of is being way
early to leave the party. But better a couple of years
early than broke.
But don't feel like the Lone Ranger. You should be aware
that this is a global crisis and that "
A quarter of Britons are saving mo money as Bank cuts interest
Of course, Briton has its own set of problems, not the least of
which is having an economic genius as a leader (
sold of tons of Britain's gold reserves around $500 an ounce, to
show you his economic thinking... See
Correction following) and now he's exercising what
I can only label and the colonialist hangover mentality when I
read that "Brown
said to call for global code on straining bank bonuses."
Is he nuts? Don't answer that...of course Britain still
pulls lots of string, but it's done from the inside and you're
not supposed to notice.
Correction: My recall of Brown's
gold-selling was too kind as a reader points out:
""Which brings me to one of the least well-timed investment
decisions of this or any age, Gordon Brown’s sale of 395
tonnes of our gold in 17 auctions between July 1999 and
March 2002. The average price achieved in those disposals
was $275.6. Gold has since risen in value by 256% – a rate
of return which would bring pride to even the cockiest of
points out this was "...the poorest return assured by his
telegraphing the market beforehand of his intended move... "
Yup. Friggin' genius! So let's tell bankers how to
run things, eh?
That brings me to a point. The reason that the
PowersThatBe are so worried about a Greater Depression, and will
print all the so-called money they can to avoid it, is that
Depressions have a nasty way of redistributing the wealth that
has recently been so concentrated among the upper 1% of the
world's - and the U.S. - population.
Which is why I call them the 'Defenders of the Paradigm' because
the absolute last thing the ultra-rich want to give up is their
riches. As a result, we'll just watch the old paradigm
continue it's painful expiration and wait around for what
University of Washington professor emeritus
Dr. Jack Lessinger calls
the coming 'age of responsible capitalists'. But don't
hold your breath: This paradigm replacement stuff takes a lot of
time and causes a lot of social pain.
Like I'm sure you haven't started to notice?
OK, that brings us around to the jobs report, which will be
center-stage in at least the opening round of trading in the
markets today. Without further ado - except to say my 8.1%
unemployment rate forecast was dead-to-nuts on...
payroll employment continued to fall sharply in February
(-651,000), and the unemployment rate rose from 7.6 to 8.1
percent, the Bureau of Labor Statistics of the U.S.
Department of Labor reported today. Payroll employ- ment has
declined by 2.6 million in the past 4 months. In February,
job losses were large and widespread across nearly all major
Unemployment (Household Survey
The number of unemployed persons
increased by 851,000 to 12.5 million in February, and the
unemployment rate rose to 8.1 percent. Over the past 12
months, the number of unemployed persons has increased by
about 5.0 million, and the unemployment rate has risen by
3.3 percentage points. (See table A-1.)
The unemployment rate continued
to trend upward in February for adult men (8.1 percent),
adult women (6.7 percent), whites (7.3 percent), blacks
(13.4 percent), and Hispanics (10.9 percent). The jobless
rate for teen- agers was little changed at 21.6 percent. The
unemployment rate for Asians was 6.9 percent in February,
not seasonally adjusted. (See tables A-1, A-2, and A-3.)
Among the unemployed, the number
of job losers and persons who completed temporary jobs
increased by 716,000 to 7.7 million in February. This mea-
sure has grown by 3.8 million in the last 12 months. (See
The number of long-term
unemployed (those jobless for 27 weeks or more) increased by
270,000 to 2.9 million in February. Over the past 12 months,
the number of long-term unemployed was up by 1.6 million."
In fairness, remember this is all fallout from the failed
economic policies of the republicorps and the Bushco regime that
left the incoming team in a position which a football
play-by-play announcer would call 'horrible field position'.
Not even a chance of a first down.
My usual comments are that the jobs report has big enough
statistical methodology holes to drive a thousand tent-cities
through and you have to look at the Table A-12, Alternative
measures of labor under-utilization where you find the PhD
burger-flippers and the former IT Directors turned janitorial
staff listed: The
U-6 Total unemployed plus all marginally attached (yada, yada,
yada) was up to 14.8% - and that just the ones the
government nose counters picked up.
Do I need to mention construction jobs were down 104,000 or that
factory jobs dropped 168,000? No? Not hardly.
But here's one last point to consider. There are only
19,877,000 goods producers left in America by this report.
They are supporting a service sector which employs 113,891,000
Now stick with me on this because THIS MATTERS:
You've got 20-million people making things and you
have 114 million selling services to the producers.
This just seems to me like it might mean we have a ways more to
go on the downside as the economy has to come back into balance.
Before the release of the unemployment data, the Down futures
were pointing down about 60 points at the open. Now, as I
write this 15-minutes after the numbers release, the futures are
pointing to an opening Dow up to flat. Maybe it means
there are less workers left to fire? I dunno, but its
counterintuitive which usually means more downside to go.
Geithner can't keep up, critics say." Might help
if nominees for key positions weren't withdrawing...
Free Lunches Canceled!
Backlash: Thousands rally at (NYC) City Hall." All
brings into focus the major problem of a democracy (or
Republic, as in Checkbook Republic). Everyone wants
someone else to suffer buts...not them! Good luck to
Mayor Mike - there's no winning this stuff...
Don't forget to keep an eye on "Reports:
Russia building anti-satellite weapons." In a perfect
replay of the 1930's Depression, this all concludes with the
world going to war in 2012...but things will likely unravel long
before, since this is an economic Fifth Grand Super Cycle.
So what happens at the end of a Super Cycle? Who knows...
but about 4,479 days from March of 2000 should start to give us
some hints. That was the 1929 peak to the attack on Pearl
Harbor and Hitler declaring war on the US 4-days later...
--- snip and sae section ---
On the Road - Again?
A loyal reader (the other one) sent in an interesting report on
her travels about the 'land of the [once] free:
This past week, I was traveling
across the country (2K+ miles round trip) and noticed a
couple things that might interest you. Granted, this is
strictly anecdotal, but you could ask your readers if they
have noticed the same things if they travel a lot. If they
have, this could be an indication of something going on
across the country that is flying beneath the radar of the
1) The number of rental moving
trucks on the road. U-Haul, Budget, and Penske trucks and
trailers were very prevalent on the major highways, more
than I remember the last time I did a cross-country trip. In
northern Arizona, there was an accident on I-40 that backed
up traffic for 3 miles (I checked, what can I say, I was
bored) and in those three miles, I counted ten rental moving
vans, each with a trailer that carried a vehicle.
What really caught my eye about
those moving vans were the kinds of cars being towed. There
were plenty of what one could term "middle class" type cars,
basic sedans and small SUVs but there were also quite a few
higher end/luxury cars, too. I saw at least one BMW, a
Porsche, and a few Infiniti's, Lexus's, and Mercedes-Benzes.
Those aren't the kinds of cars one normally sees being towed
by a rental truck.
2) The number of pickup trucks
and cars laden with belongings, as well as vehicles towing
other kinds of trailers. I spotted a few horse trailers and
utility trailers filled with household goods. It was like if
it could be loaded down, it was used. Some of these vehicles
were running in a convoy, all loaded down and heading out
One car that stood out, simply
because I didn't think it was road-worthy, was a small sedan
piled with belongings to the point that the rear of the car
nearly scraped the pavement. The car was also towing one of
those trailers like one sees used by lawn care people, and
it was loaded down with stuff, too.
3) I counted 2 Wal-Mart trucks
the entire trip. Two. Those trucks used to be everywhere.
However, Family Dollar trucks were all over the freeways. I
lost count of how often I saw those trucks. Sometimes, they
would be running two or three in a line.
4) Huge RVs were everywhere and
most were towing driving cars. I realize that this is the
time of the year the snowbirds are out and about so that
might account for the number of RVs I saw. Still...there
were a lot of them and the majority of them were very big.
I hope I wasn't seeing the start
of a 21st century "Grapes of Wrath" migration, but I suspect
that's what's happening.
What I wonder if this is happening in all the country or if
it was just here in the South?
Not rich yet,
- this is the kind of first-hand economic report that makes more
sense to me that how the Bureau of Labor Statistics uses
telephone incidental surveys to form up its unemployment
numbers. Some comments on a few of these observations:
You have to remember to be careful to look at a calendar when
you're counting things like 'moving trucks' because there's a
tendency for people to move right after the first of the month.
That's when many jobs end, rent is up, and so forth. Still
good observation. And the plural of Lexus's is 'Lexi'.
What you're likely seeing is the leading edge - and it's only
that - of what the time monks over at HalfPastHuman have been
muttering about for a year now: the new Diaspora - the
're-scattering' of peoples around the world for a variety of
(throw your own darts here) weather, environmental, volcanic,
economic, social, and genocidal reasons. Did I mention the
global coastal event? That's starting going mainstream in
maybe April, so tune in to a MSM near you and see if you can
catch it going by. Say, you weren't on Interstate 8 or 10
coming out of L.A. were you?
Wal-Mart sales were up - and they are doing better than most
retailers. You maybe just hit that between delivery cycles
and locations - still a data point worth noting because we've
noticed that Wal-Mart seems to have skinnied up it's stock
levels on the shelves here in Palestine, Texas, too. And,
the local outlet is just a couple of blocks from their big
regional distro center here...so I'll be watching.
My suspicion is that RV'ing may - for a lot of families - become
the new "living in cars." As I've told you a couple of
times, you can pick up a used RV on Craigslist for a few grand,
and then refurb it yourself and get something quite roadable.
I figure I could put a family of four on the road with an RV and
some non-stylin' but perfectly serviceable used car (think used
Geo Metro, or something like that) for maybe $15,000? Then
all you have is the park expenses and with a car to go looking
for work in different areas, we may be seeing the leading edge
of a new kind of migrant worker: The kind that lives in an RV,
has the high mileage commute car, and lives wherever there's a
new for an IT Director, sales manager, product developer, or
whatever. A kind of Second Depression version of college
(using the Wikipedia plot summary of John Steinbecks 1939
original, the retooled (read: new & improved for the
2000's/Second Depression would go something like this:
narrative begins from Tom Joad's point of view just after he
is paroled from
homicide and engineering cube farm. On his
journey home, he meets a now-former preacher, Jim Casy, whom
he remembers from his childhood, and the two travel
together. When they arrive at his childhood farm home, they
find it deserted
foreclosed. Disconcerted and confused, he and Casy go to his
Uncle John's home nearby where he finds his family loading a
converted Hudson truck
SUV with what remains of their possessions;
the crop s
were his income was destroyed in the
collapse of Globalism and as a result, the family had to
default on their loans. With their
farm house repossessed, the Joads
seek solace in hope; hope inscribed on the handbills which
are distributed everywhere in
Oklahoma California, describing the
beautiful and fruitful country of
and high pay opportunity to be had in that state. The
Joads, along with Jim Casy, are seduced by this advertising
and invest everything they have into the journey. Although
California would be breaking
parole impact his unemployment comp, Tom
decides that it is a risk, albeit minimal, that he has to
Steinbeck retooled works out at a perfect New Paradigm farmer?
Oh sure, you could maybe use Michigan instead of Oklahoma, but
you get the idea... the migration from farm to Big City is
flipping and now it'll be visa versa since roles reverse in
alternative depressions. Slick, huh?
I think I outlined this process in one of the Peoplenomics
reports a long time back - where you go to a genuine classic
of a book and just do a 'search and replace' on key terms to get
a whole new sense of how things are playing out within a
classical literary context.
I remember doing this at one time on
of Species" which you can find at Project Gutenberg and
elsewhere. I was specifically looking for a framing
paradigm for the evolution of software and found retooling
Darwin into a text on computer hardware and software evolution
us8ing the 'search and replace' function of Word, turned it into
a wonderfully useful reference that help me 'wrap my head'
around concepts that were newish at the time - like developing
'evergreen ERP' software...
Say, this is getting way too serious! The weekend is
almost upon us and there's much to do. Let's shelve this
kind of working brain cells stuff until Monday, shall we?
Otherwise I might feel compelled to retool
Twain's classic "Life on the Mississippi" to something more
contemporary...how about "Life on the Freeway" - just to (here
comes the worst pun you've seen so far today) drive my
Freeways are well worth reading about. It is not a
road, but on the contrary is in all ways remarkable.
Considering the Missouri
Interstates its main branch, it is the longest
system in the world --four
thousand three hundred 46,876 miles .
It seems safe to say that it is also the crookedest
river system in the
world, since in one part of its journey it uses up one
thousand three hundred miles
billion dollars to cover the same ground that the crow would
fly over in six hundred and
seventy-five free. It discharges three times
as much water
pollution as the St. Lawrence
Los Angeles, twenty-five times as much as
the Rhine St. Louis,
and three hundred and thirty-eight times as much as
the Thames. Oregon. No
road system has so vast a
drainage-basin pollution footprint; it draws
its water fuel
supply from twenty-eight States and
Territories Countries; from
Delaware Texas on the
obviously taken some liberties with facts (because I don't have
time to do the requisite research at this (still dark) hour.
But all wrapped up I call it the "Substitution Method of
Learning" or, if you're a student, the "Substitution Method of
Writing". Have at it.
being symbolic processors of concepts, this method is a dandy
'head opener' and allows easy rearrangement of concepts to
arrive at new - possibly innovative - approaches. Besides that,
it's often just plain old fun.
Send snip and save items to
--- end snip and save section ---
Thursday March 5, 2009
One Guy Who "Gets It"
I happened to catch the interview with Nobel Prize winning
economist Joseph Stiglitz on one of the money channels on
Wednesday. What he had to say about the bankster bailout
made total sense. First, he said that the American
taxpayer doesn't mind guaranteeing the deposits of bank
customers. But, what the public never signed on for, he
notes, is the taxpayer never agreed to underwrite the
gambling losses that have been run up by the trading desks
who were involved in flaky/dishonest derivatives speculations.
Those losses, he figures, should go back to the bank
shareholders, boards of directors and the bondholders who bought
into the situation.
Stiglitz also says the "too big to fail" mantra isn't honest,
either. You simply move the 'clean depositor' monies from
the bad/speculative banks to the well-run (e.g. didn't
speculate) banks and if the bank with the bad debt fails, oh
Makes perfect sense to me and I expect anyone else
who looks at the problem with only fairness and even-handedness
in mind would see it likewise. Which - I reckon - just
about ensures that it won't be acted upon by the powers
that be. They're so deeply in bed with the crooksters and
fraudsters who want to pawn off their losses on working people
that nothing seems likely to change. Remember that word?
Change? (I sure know how to tell 'em, don't I?)
Later today, we'll get another hearing on AIG's bailout.
If bailing out banks that make crooked speculations didn't make
sense, so too bailing out an insurance company which stepped
into speculation doesn't make sense, either. Since you and
I are owners of 80% of this POS I figure I can speak my mind on
it. See you in the camps...
The head of the
Congressional Joint Economic Committee is asking Ben Bernanke
over at the Fed for details about the counterparty transactions
involved as they relate to the bailout, but I figure most of
that will come down to a classic case of obfuscation, since
that's how much of this Second Depression is revealing itself.
If you look at yesterday's chart showing the
near-perfect correlation between the decline of the NASDAQ
Composite since 2000 and the decline of the Dow Industrials in
the 1930's Depression, I think you'll see what I mean;
obviously the system tried to protect itself with a war
to sop up unemployed people just as the Civilian Conservation
Corp sopped up excess manpower in the 1930's while the Housing
Bubble filled the role of the Works Progress Administration by
keeping housing exploding whi8le something like half a million
of the nation's heads of households were busy out of the
country. Know what that is? Formula for disaster --
and this patch of economic troubles we're now in will last until
someone besides a wack job in East Texas and a Nobel Prize
winning economist like Stiglitz figures it out and starts to
call it like it is.
In the meantime, expect to see a lot of what I call
pseudo-solutions (or 'straw dogs') to keep you thinking that the
folks who promised change really have a plan - besides leave you
with change. Some examples? Oh, sure, you betcha:
"British leader Gordon Brown asks for economic unity"
That's a pant load, isn't it? First, we fought a
Revolutionary War over being part of England. Second,
let the Brits sort out their own crap. We've got a
full enough plate here. Since we've already bailed
Britain out of two world wars, I think it'd be dandy if
Brown would stop trying to spread the pain around, go back
to England and tell the bankster class there that they have
to deal with their own consequences. Anything else
sounds like foreplay to the next BOHICA - a bankster
controlled world currency which America clearly won't
swallow. At least here in the Republic of Texas.
Bank of England has cut rates and is buying up Fleet
Street's toxics meantime. Have fun.
Reserve" says it will not release bank lending data which
Bloomberg News has filed suit to get released. So,
the next time you hear Ben Bernanke use or Tim Geithner use
the word "transparency", try not to roll on the floor with
laughter like I do. You'd be right, of course, but it
ain't polite. Hold your laughter till after the
testimony or press conference, please.
theory, perhaps, that a good offense is the best defense (or
we call it 'spin & win') I can't help but notice that
Treasury Secretary Geithner is attacking oil and gas tax
breaks. Again, I have to hold my sides from
laughing so hard at this: Rather than tell the car
standards people to change their impact standards so
we have get some of those ultra-high mileage cars so readily
available elsewhere in the world, the Obama crew wants to
tax more heavily the energy inputs to the economy. You
know, the kind that make fertilizers (NG) and get you to and
from work if you still have a job - like oil. And why
aren't they Obamites fixing it so we can drive
ultra-high mileage cars? Like other administrations
before them, they are caught in a pinchers movement between
the insurance lobby on the one hand and the energy lobby on
the other. Makes actual policy-making a joke, doesn't
it? But heck, if the overnight psychographic reports
say a lot of under 35'ers will like a Greener Geithner,
let's play spin & win, huh? You'll please excuse me if
I stew about crazy federal rules which keep me from buying
one of those 65 MPG Ford products available in other
countries. Related: Am I the only guy who figures the
pollution standards should be set on a vehicle weight
adjusted basis? Why not allow 1,200 pound, 600 cc cars
which even without a catalytic converter produce less NO2
than a 4-ton, 5.9 liter super-hog not have to comply with
the same rules? Are people really that stoopid?
(Hint: YES!). Enjoy Green Tim. I'll stay
with my shots of el Don, thanks
we might be seeing the next pseudo-bubble coming as
the White House kicks off a health care forum. Am
I the only one that reads headlines like "Obama
said to be open-minded on health-care change" and says
"Aha! next bubble!"? That oughta get the pharma
lobbyists throwing around lunches, honorarium checks and
promises...Yee haw! (Wait! Is my cynical pill
kicking in? 'Nother shot, pleeze...)
8.3 million US mortgage holders are underway according to a
survey out on Wednesday. The way I have it
figured, even though there is a $75-billion mortgage relief
program kicking off this week, the country still have an
evolving problem of more and more homeless living under
overpasses and in tents. Hey! Speaking of which,
check out this week's 'toon from
Ain't it the truth? Remind me not to get into too much of
that truth stuff...
Well, as I said at the top of today's opening barrage: Joseph
Stiglitz is one guy who 'gets it'. Lemme see, that's me,
you, Stiglitz and the time monks which makes it five of us.
It's a start anyway.
Latest from BLS on Q4 ('08) Productivity:
growth for the fourth quarter of 2008 was revised down
by 3.5 percentage points in the business sector and 3.6
percentage points in the nonfarm business sector from the
estimates published February 5. In both sectors output was
revised down by 3.2 percentage points and hours were revised
up by 0.1 percentage point. Productivity growth during
calendar year 2008 was not revised in either sector.
Productivity growth for the fourth quarter of 2008 was
revised down by 3.5 percentage points in the business sector
and 3.6 percentage points in the nonfarm business sector
from the estimates published February 5. In both sectors
output was revised down by 3.2 percentage points and hours
were revised up by 0.1 percentage point. Productivity growth
during calendar year 2008 was not revised in either sector.
how I've told you I think we're at consumer saturation on big
ticket goods? Well, the report today says durable
goods manufacturing walked off a cliff (-14.8%) in Q4 while
disposable crap (e.g. nondurable goods) was up 7.4%. So
you're not taken by surprise by any of this, right?
the market may rally as high as 7,148 before we head back down
the flusher. But no rally till we get past the 100 point
drop in the Dow coming at the open.
across an interesting timing site youi might want to
http://www.fibwatch.com/ won't give you which
direction things will go, but you should have that from your
Elliott and other ,directional tools. Nope, this is just
timing. The first two turn points today are 9:44
and 10:06 AM so if I were guessing, I would say down till 9:44,
small 20-minute uptick, and then head down again...so let's see
how that plays out...
of software tools - I ordered a copy of
from Inspiration software yesterday.... their
is a great mind mapping tool if you're not already aware of it -
much less complex interface than
FreeMind which is, admittedly cheaper. I've just been
using Inspiration for years and too lazy to change, I guess...
Oh, how about "You gotta have the tools" if you're gonna play
While it may sound like I am a constant complainer about the
Obama administration, I'm really not. When they do
something good... I try to mention it. Like
the choice of a real, genuine, been through 11 of them, Florida
emergency manager to run FEMA. Craig Fugate has been
critical of the Department of Homeland Security in the past and
while he may not be welcomed by all bureaucrats, he's got
something which was missing in the Buchco KatRita disaster:
Nukes and Such
environmental groups are concerned about a shipment of recycled
plutonium going from Cherbourg, France to Japan, there's a
lot of other action on the nuclear front to ponder over your
what THE under-covered story in the MSM is when it comes to
mounts of Syrian nuclear cover-up: US" Remember the
Syrians had a purported reactor bombed by the Israelis in 2007.
I only mention this because
you might have read Isaiah 17 and have figured out what it
might mean... in case you missed the 4,479 day war clock
from the 2000 stock market highs that I
explained yesterday. If we make it through all the
other stuff like flu in November and then earth changes and
global coastal...where's my coffee?
.--- snip and save section ---
Protecting the Rich Department
I'm not saying that the 47,000 folks who have Swiss bank
accounts and are having their bank info hidden from US
authorities by the obliging Swiss are rich. I'm
just saying that when the rest of us do fill out our IRS forms
honestly, what do these folks have to hide?
Now, you're wondering, why would old George say something like
that? How about "Because my blood pressure went skyward
when I read that "UBS
refuses to give U.S. names, replaces chairman" as the Swiss
try to keep secrets secret.
Although I lived for a couple of years in a tax haven (Cayman
Islands) and was employed there, it's only recently that I've
started to wonder about the righteousness of tax-free countries
like the ABC Islands, Turks, Caymans, Channel Islands, and of
course, our friends the Swiss.
The view from the government of most tax havens is that if "tax
avoidance is not a crime" in their country, then they could not
be compelled to report the financial information of a person
using their tax-free financial systems. The US made some
progress in what I recall as the Scotia Bank decision in the mid
1980's. The US was able to get some information about
money from drug dealings because that was a crime in certain tax
havens, as well as in other countries. And (going from
memory here) the US held that if a foreign bank had even one
bank in a country with which the US had a tax treaty (such
as Canada) then the bank could be compelled to disclose.
However, the rate of disclosure makes snails look like race
horses. Reason? All the narco money floating about
which needs to be washed/sanitized in order to get 'invested'
into legit businesses.
Funny how the US has been willing to invade and level small
Mideast countries on the pretext of WMD's while at the same time
officials who benefit from slightly scrubbed narco-dollars
change the game slowly enough such that new workarounds can be
found. Oh, and they don't seem to ever get the regulatory
reach sorted out well enough to go after all those virtual
entities set up by the major banks to handle their derivatives
trading offshore where essentially all taxes are dodged.
Seems to me that while the banksters and their minions like
Gordon Brown may be trying to spin the current crisis into a
call for 'economic unity' (which I read as 'global currency' of
some stripe) shouldn't we first do something a lot more simple?
I Mean like disclose or force reporting of all assets and
transaction of all US citizens including stock options paid
offshore and that kind of thing?
Why is it that we little folks keep getting shat upon while the
SIV-drivers own the world? Seems to me that we've got to
have either a "tax everyone no matter what" approach, or "tax no
one". Anything different isn't just a violation of the
fundamental American tenet of 'equal protection', it sets up
incentives for crooked people to act anti-social.
And yes, when I was living in the tax haven, I used the Miami
office of Deloitte to do prepare my filings and I reported every
dime. Which is more than I can say for many of the US S&L
officials who I saw bring money out of the US and deposit
"We've been through this before" sidebar: In case
you don't remember the 1980's S&L debacle, here's how it worked.
A US investor would buy an apartment complex for say $100,000.
They'd play golf with an S&L official and the first thing you
knew, the property was appraised at $2,000,000 and the investor
would take the loan proceeds as cash and move them offshore.
Legal so far, since the proceeds of a loan aren't taxable,
right? Then they would declare bankruptcy in the US
and conveniently forget to mention the pile of money
offshore which was nominally held by local offshore 'nominees'.
They'd then declare BK in the US, give up their US
lifestyle for a while, live in the Cayman Islands, Belize,
Turks, or wherever, and do a lot of traveling on the interest
run up in the offshore account. The S&L's were left
holding the bag(s). Except for the Zero Halliburton
attaché's full of money traveling out of country.
The modern analog here is the SIV accounts and the offshore
incentive compensation payments. All of which boils down
to why we should tax consumption not income. That
way the frugal among us (and the poor who can't afford much)
would pay little or no tax while the fat cats who live the phat
lifestyle would have to pay-as-they-go rather than the current
Then we could have a tax policy that makes sense: Tax on
solar panels? Zero. Tax on $10 cigars? $10.
Tax on speedboats? 30%. Tax on sailboats? 10%.
You see? That's how we can really fix America.
Tax those things which are wasteful/unnecessary or just outright
luxuries. Give tax breaks to products which consuming more
of would improve America. Like high mileage cars,
unprocessed foods, and all the rest.
Too simple? Well, it does have its own string of
complexities. But don't look for it to happen any time
soon because why? because there's no money in it for
lobbyists and lawmakers, LOL.
But, I suppose you already knew all this. Besides, the
subtlety of the problem is that the sociopolitical system
probably couldn't handle all the ITS and tax professionals who
would be laid off by such a simple approach to taxing...like we
need any new unemployment about now?
Some good ones this morning:
"This morning it was my wife's
turn. I was getting out of the shower when she walked in
guffawing. "What is it?" I wondered aloud. "National
Proletarian Radio," she chuckled. "There was some professor
bragging about offering a master's degree in the study of
the Beatles." I almost choked. [ Note carefully this is not
"beetles", as in plenteous bugs, but "Beatles", as in
British rock band.] "Well, I suspected that higher education
is nothing but a public works project to employ the
unemployable & keep the rest out of the work force. Now
What do you expect in a country
where hip-hop is considered serious art? I mean, I like
"Wildwood Flower" & "Soldier's Joy," but "Toccata & Fugue in
D Minor they ain't.?"
More? Oh yeah... lots more...
of the world was nearly upon us and it barely rated a
mention by Brian X. the news caster between a couple
of puff pieces. And networks wonder why they suck...."
interesting response to a part of this week's report where I
I don't expect you to buy
that the reason gasoline prices are down is to drive ethanol
producers out of the business...that's really a deflationary
coincidence. Or, is it?
"good question George! could it
be a play to drive them to bankruptcy and then take them
over for pennies on the $? it wouldn't be the first time a
massive power play like this was made.
you're an options guy right?
what do farmers do with their crops? hedge 'em by selling
'em forward right? to whom? how 'bout future delivery to
those eth plants? and what's been SOP in bankruptcy court
for anyone holding a contract with a company that bellies
up? they get paid first right? before the creditors even. by
whom? the purchasing entity right? well guess what...
bankruptcy courts are making an exception to that rule in
the valero/verasun deal. according to the following report,
for the first time in history the buyer won't have to honor
"For the first time ever the
Federal court ruling in the VeraSun bankruptcy stands to set
a legal precedence that would allow oil company buyers to
reject contract commitments for grain and corn purchases
VeraSun made with working farmers in advance of the coming
Is this a
great country, or what? But not a happy one, as evidenced
in this email:
George, Thought you might be
interested in the results of the quarterly CFO survey that
Duke and CFO Magazine results just came out today. The
survey was concluded on Feb. 27. Excerpt from the press
-- CFOs express record
pessimism. This survey has been conducted 52 consecutive
-- CFOs expect to lay off nearly
6 percent of their workforces in the next year, representing
a staggering 7.6 million job losses
-- Nearly 60 percent of U.S.
companies indicate they will institute a hiring freeze for
the next year. In addition, 57 percent will enforce a wage
freeze or reduction, with one in five companies expecting to
reduce wages over the next year. Thirty-nine percent will
reduce employees' work hours.
You can read the full report,
plus charts, here:
but not least, this one with a link to a radio documentary worth
"Just so you know, our military
has taken a VERY active interest in climate change. Our
military planners aren't that concerned about ocean rise.
Those effects are a century into the future. They ARE
concerned about shifts in precipitation, which will
radically reduce agricultural production with just a 2^C
shift, not impossible with a business as usual approach to
Gwynne Dyer is military-issues
journalist chummy with American and British generals,
admirals and the like who had little professional interest
in climate change until a couple of years ago. He's since
examined just why the military think-tanks and internal
planning organizations have taken such an active interest in
climate change. It comes down to food.
I know this won't persuade
anyone here, as Americans are unique in their ability to
view everything as an affront to their cultural values, but
the radio documentary Gwynne Dyers did for the CBC and
broadcast in January is just exceptionally well done. For
those who are interested:
Gwynne Dyer - Climate Wars CBC radio documentary (streaming
audio at site)
My only hope, for any
fencesitters that might listen, is that they concentrate on
one subject: positive feedback & runaway climate change. One
thing the series lacks is a visual aid to just how the
precipitation patterns might change.
The change in annual average
precipitation projected by the GFDL CM2.1 model for the 21st
century. These results are from a model simulation forced
according to the IPCC SRES A1B scenario [IPCC, 2000] in
which atmospheric carbon dioxide levels increase from 370 to
717 ppm. The plotted precipitation differences were computed
as the difference between the 2081 to 2100 twenty year
average minus the 1951 to 2000 fifty year average. Blue
areas are projected to see an increase in annual
precipitation amounts. Brown areas are projected to receive
less precipitation in the future.
Busy day - so see you in the morning....
Wednesday March 4, 2009
Another Helping of
Look, I'm not trying to start anything here, but let me ask
this: Since the public (e.g. we taxpayers) now own
something like 80% of AIG, doesn't this mean AIG will have to
stop offering insurance to churches? I mean think
about it: If the public owns AIG (mostly) wouldn't their
providing insurance to churches violate the principal of
separation of church and state? This is the kind of
unintended consequences that are boiling around the bailout/free
money festival for corporate bad managers/bad decision-makers.
Then there's debate over what the longer-term impacts of the
administration's tax and spend will be good or bad: "White
House Knocks Jim Cramer For Calling Obama Budget "Greatest
Wealth Destruction By a President"
An d, as if Cramer's picks aren't good enough, we note that "Obama
analyzes stock market" and concludes it's a good long-term buy."
But wait, is it?
One criticism of the Dow Jones Industrial Average is that its
membership has been shaping-shifting over the years to avoid
ugly economic reality summed up by Wikipedia this way (with my
DJIA was founded on May 26, 1896, and represented the
average of twelve stocks from important American industries.
Twelve years earlier, Mr. Dow´s initial stock average,
containing 9 railroads and 2 Industrial stocks appeared in
the Customer`s Afternoon Letter a daily two-page financial
news bulletin that was the precursor of Wall Street Journal.
Of those original twelve now, no longer railroad, but purely
industrial stocks, only General Electric is currently part
of the index."
There's a chart you need to see...but before looking at it, set
down your coffee cup and take a deep breath because this chart -
which I shared with Peoplenomics subscribers last weekend -
ought to scare the hell out of you: It shows how the 'hot
money' in the NASDAQ Composite since the All-Time High of 2000
has been almost a dead-to-nuts replay of the collapse of the
This is what happens when you line up the Composite from March
2000 with the Dow from its September high in 1929. NOT
something that anyone has probably bothered pointing out to you,
I'm sharing this with you because there's a small (but
statistically significant) chance that since the Dow, S&P, and
NASDAQ set their (purchasing power parity) all-time-highs in
2000, we may all be living out the running of the 4,479 day
clock that ran from the Dow weekly high close (9/3/1920) to the
US entry into World War II (December 1941).
As long as I'm ruining your morning, here are the specific
Date of S&P 500 ATH 2000
Add in 4479 days to project next Trough War
Date of NASDAQ ATH 2000
Add in 4479 days to project next Trough War
Date of DOW 30 ATH 2000
Add in 4479 days to project next Trough War
I don't often share the proprietary content of Peoplenomics, but
consider this a humanitarian gesture on my part. Another
implication: We may not get such a huge bounce from these
kind of stock levels, at least if the NASDAQ Composite and Dow
parallel continues strong going forward. Stuff to ponder,
is it not?
Just as the Radio Trust was running into problems in the last
Depression, so too, automakers are running into problems in this
is saying that up to 300,000 jobs could be lost in Europe if
it goes bankrupt. Subtle pitch for aid...
But while the aid requests are flooding into Washington, seems
there's growing opposition to higher taxes to pay for the aid.
In fact 'fierce opposition' as one headline puts it.
what's the administration planning to fill the gap? For
go after international tax cheats. you know, the
people who hide their money offshore.
while the revenue side is contentious, it's not just the
automakers who've got their hands out fxor 'More!". Ben
Bernanke says the $700-billion committed to help bankers (at the
fed window) may not be enough - and more could be required.
Excuse me, Mr. Chairman? "May" is
probably not the word.
How about "will likely" and give us all a little helping of
'transparency' for a change?
You'll have to forgive me if I am a little worried when I read
headlines like Britains Gordon "Brown
to urge US to 'seize moment' to help world solve financial
crisis." I don't care for One Worlders using words like
'seize' anything in these times, although once the crisis gets
deep enough, certainly the call for one currency will almost
certain come. As long as it is gold it might not be
such a bad idea, but I doubt it would be anything so difficult
to manipulate. how about a digidollar world?
The collapse of the financial world became a sure thing as soon
as there wasn't another bubble to blow up: Since we've now
exhausted the Housing Bubble and the War Bubble has about run
its course, as I see it, we might as all sit back and watch the
unintended consequences of this Greater Depression unfold over
the next year or two desipite protestations that it's not really
One reason why - argue those who disagree with my assessment -
is that the unemployment rate is not as high as the
Depression-era. But wait! have you ever looked at
how those numbers are collected? Telephone incidental
surveys? (Number disconnected? Let's find someone
else to call...) Cutting people out of the numbers when their
jobless benefits expire? More Friday when new unemployment
figures come out.
But, meantime, bankruptcies are piling up all over the place.
Blockbuster has hired a fir to consider a possible bankruptcy
Reader's Digest restructure, too? And among consumers
bankruptcy filings are up nearly 30-percent from high
Lots to stew over, isn't it?
New FCC Boss
President Obama has
nominated Julis Genachowski to head up the FCC. I did
a search of the FCC database this morning, and don't find him as
holding a ham radio ticket, which has me wondering if this means
we will see the
broadband over power line monster (BPL) raised from he dead?
Seems that the
Microsofties are working on a new search tool called Kumo.
I tried www.kumo.com and
got an "Access Denied" error,
so maybe not ready for prime time? Maybe this makes me one
of the world's first 'kumo wrestlers'?
I see the Dow futures are up something like 100 points.
But, would I believe the bottom is in? While it may have
gotten down to the high end of Robin Landry's target zone, I'm
not sure. for one thing, the advance/decline line sucked
on Tuesday. For another,
a new ADP jobs report out this morning says the private sector
cut almost 700,000 jobs in February. That means we
could see the unemployment report Friday hit 8%...or maybe a tad
more, depending on how much of this is captured in the
government's number and whether the workforce number is jiggered
up or down.
My dart for Friday says 8.1% unemployment...just a dart for now.
So yeah, the futures may point up this morning. But
they pointed up at the open on Wednesday and the Dow still lost
another 37-points. Good day-trading climate, if you like
playing with sharp knives, though...
--- snip and save section ---
Farming While We Can...
A reader sent in a very interesting summary of the attempts to
Here is a discussion with lots of links about the
agricultural situation in this country and the beginning of
the attempts to regulate small farmers out of existence....
The bills (Stop HR 875, HR 814, SR 425, and soon, HR 759 )
would require such a burdensome complexity of rules,
inspections, licensing, fees, and penalties for each farmer
who wishes to sell locally - a fruit stand, at a farmers
market - no one could manage it. And THAT is the point. The
whole dirty tricks point. The whole "be in tight control of
everything needed for survival because it'll be worth a
fortune" at some point."
Email Congress here.
most worrisome to me is HR 814, which would make the
National Animal Identification Act federal law. (Don't get
confused with the previous 2007-2008 HR 814 which had to do with
child-proofing of gasoline containers, we're talking the 2009
have told you before, this is how bad laws/excess intrusion
comes along: A
bad idea is introduced as 'voluntary' and as soon as enough fish
swallow the bait, the program suddenly becomes mandatory.
discussion with one of my neighbors last night about the NAIS..."It was
designed to allow the government to go back and see if cattle
were eating meat - which can set off the
diseases.." (Like CJD).
As I see
it, though, government is going about solving this problem exactly
the wrong way. If you want to keep meat products
out of cattle feed, don'tcha think the place to monitor would be
the handful of feed producers? Why pick on the farmer.
I mean except to pimp the RFID business and create make-work
jobs in true Soviet fashion?
answer, to that one, my friend is simple: Government wants
control of the food supply. On the pretext of
'protecting us' from terrorism and whatever, but that's Nanny
State thinking for you.
See, if government
controls food (and money) then they really do have the people
that ceded limited power to them by the proverbial nuts.
And since we can't even recall them when they turn a deaf ear to
their constituents once elected and the lobbyists get hold of
not like this, but the fastest growing industry int he whole of
the Western world over the past 100 years has been what?
Government. (including various services and
supporting groups such much of the 'financial services industry'
- which I view as partners in fraud.
don't want to connect the dotted lines formed by disappearing
ammunition/ammunition shortages, a revival of gun
control/confiscation efforts, massive increases in food supply
control on disease or terrorism fears, and the list goes on and
on...that's fine. I don't expect you to buy that the
reason gasoline prices are down is to drive ethanol producers
out of the business...that's really a deflationary coincidence.
Or, is it?
to be a joke that government would tax air if it could - and
with some of the new environmental laws on the horizon, that
'joke' is on the verge of becoming real, too. No longer even
remotely funny, is it?
Not go go
into a long rant here, but I'm a 100% Constitution supporting
American. But I'm also well enough versed in history to
see that much of what's going on at the federal level was never
intended by the Founders to happen. In the past, when
the federal/central government has attempted to overstep the
(supposedly limited) power
ceded it by the various states, you get things like the Civil
central government hasn't owned up to the real cause of the
current economic depression (unsound money) as being the cause,
we will likely see several years of thrashing about until
things get worked out. But, in the meantime, those of us
who connect dots will worry for the future of our country and
countrymen. Especially those who have found more than half
their life savings gone in the stock market's long unwinding.
some genuinely good news out there, however. I was talking
to a client in the Ohio area yesterday and he reports that land
prices are now beginning to collapse. This is something I
have heard elsewhere too. My client's looking at a 75-acre
piece of land which is part pasture, part wooded in a
neighboring state to Ohio...Oh, and the price? Just $40,000!
hearing much the same thing out of western Oklahoma. So
around the edges, farm land is starting to collapse.
a Peoplenomics subscriber, this week's report will likely pick
up with another chapter of my work-in-progress ebook: "13-Acres and the Internet" - an
update of the classic Depression-era Five Acres and Independence: A Handbook for Small Farm Management.
in a position where we will all likely soon have an opportunity
to stand up and be counted as we transition to a more
sustainable lifestyle- one that hopefully will give us a chance
for another couple of hundred years as a nation. It's my
hope that enough of us can embrace the change to
ameliorate those other forces which could rip the country apart.
As I see
it, though, the answer is in reinventing the pioneer spirit -
fostering a sort of techno-pioneer spirit...and just trying to
solve everything with more and bigger everything, especially
more and bigger government. The people who made the
country great were the inventors, the farmers, the manufacturing
pioneers. Best I can figure, government's abdicating it's
Constitution responsibilities had a lot to do with getting us
into this mess...helped along by Bill Clinton's repeal of the
Glass-Steagall Act that actually encouraged the bad behavior
of financial institutions that we're paying the price for
want a really worthwhile future for a young family and a big
adventure? Go techno-pioneering and build that new kind of
lifestyle which is close to the earth and uses the absolute best
of high tech. That makes a lot of sense to me, even if
most of what else is going on in the world does not.
that, or buy a sailboat....
Living Aboard, Redux
A recent Peoplenomics report covered the good ( and
bad...there's a fair bit of it ) about living aboard a sailboat
these days - based on my living board for 10-years on
my boat in the Pacific Northwest, San Francisco, and San
Diego.... Well, a reader (who didn't read the report, BTW)
I took the plunge and bought a
boat.. Aye aye aye... It's a 30 Ft Irwin Citation. it's been
left neglected for about 10 years or so but shining up
easily. Heres a quote from me regarding the phrase " A
rising tide raises all boats".. should be "A rising tide
raises all those boats not nailed to the bottom". I almost
subscribed to your blog when you discussed live aboard, sell
me a bit more of that. I'm moving aboard in the next few
days. I spent the last 3 days on the V berth and almost done
with the head. 24 days I reckon and we're deep blue bound.
I'm almost off the grid so I may be offline for a bit.
I just got my general ticket
here in Melbourne, FL a few months back and I gotta turn
this turd into a radio boat. I just found the antenna for
the VHF, it's under the now white engine vent to port.
Halyard antenna for the SSB er HF. Any recommendations on
good HF seawater ground? I gotta pull her for a bottom job
in the next few days to reprop and scrape and figure I need
to do a thruhull. She must be mine now, my blood on her hull
and I christened her "Almost Home" dallas,tx"
(since he didn't get the Peoplenomics report: First, when
repropping, there are essentially three approaches to
propellers: The standard fixed prop which gets great
'bite' but which will cost a half knot (sometimes more) in light
air because of the additional front resistance posed by fixed
blades. Three-bladed props give even better 'bite' but
again, more frontal area.
prop class is folding props. When powering ahead, first
centrifugal force and then water pressure keeps the folding prop
unfolded. However, when backing (reversing) the water
pressure coming from the 'wrong direction' will want to 'fold'
the prop back. So, when you want to effectively back-down
(boater-talk for go backwards), a short burst of power to flip
the prop out and then remember as you go faster in
reverse, there's more folding pressure.
Makers like Gori dominate this category.
prop is a 'best of both worlds' approach called a 'feathering'
prop. It uses what you can think of as 'pitch stops' to
allow passing water to automatically feather the prop.
When power is applied, water pressure gives the best pitch
whether you're going ahead or backing. Makers like
Max-Prop dominate this category - and since it gives the best
performance, but is a more complicated bit of machining inside
the prop, it's usually the 'high end' of sailing props.
The category leader has been
On my boat
(the "Magic Elf") I had a Gori folding prop and was quite happy
with it. The amount of frontal area was relatively small
but that wasn't why I liked is: If you're planning to do
any amount of sailing where there are nets, crab pots, lobster
pot, shrimp pots, and such in the water, the folding prop's
advantage over a Max-Prop is that because its blades fold
completely back, there's a chance you will be able to run
over a net/shrimp/crab/lobstering line and not foul it on your
give you a fool-proof solution, however. I remember being
up in the Strait of Juan de Fuca one time and getting a gill net
stuck in the space between the big spade type rudder (which was
almost 6' tall on it's own) and the 6' deep fin keel on the
boat. To the angry shotgun reports of the fishermen, I
carefully brought the boat downwind and then used an extendable
boat hook which could get out about 10-feet to push the
offending line down, under the rudder, and get under way again.
On the other hand, our arrival in San Diego after an overnight
sail from L.A. ran over several pots that were set near the
entrance to San Diego harbor - and while motoring, throwing the
engine into reverse then killing it, prevented us from snagging.
through the Locks in Seattle, there are many times I wish I
had a Max-Prop. Decisions like these are the kind of thing
that serious sailors debate for hours, days, or weeks on end,
depending on how much rum is available and what real work tries
way to ground a sailboat for radio purposes is another area
fraught with volumes of discussion. But, since in one of
my incarnations, I wrote a draft of the SG-230 SmarTuner manual,
I can give you a pretty good description of the problem and
the antenna you're planning to use: Without a doubt ,THE
best antenna is to use the boat's backstay. This is the
wire cable that attaches from the top of the main mast (sloop
rig) and the back of the sailboat. Be especially careful
is you are using a 'split backstay' - which looks like an upside
down "Y" with the single line going to the top of the mast, a
'y' and the two others attaching to the back corners of the
boat. You'll often find the 'y' to be a high resistance
point, so a jumper around it with #4 copper is a good idea.
Now, as to
the grounding itself, theories are common. One theory
which I've seen work well is using the brass or bronze
through-hulls. These are often connected together for
lightning and corrosion/electrolysis reasons, but some folks
insist on making them and maybe a fancy external sponge bronze
radio grounding plate. Personally, I've never been a fan
of this approach for several reasons. The first is that
the connection from the radio to the ground must be extremely
low inductance, otherwise, the antenna will look 'larger'
than the ground system and the result will be getting RF 'bites'
if you touch the radio while transmitting. This is
something most hams don't remember: If you get RF 'bites'
the ground is acting as the antenna...so more work is needed.
inductance ground might be 10-20 bundled #14 stranded wires from
the radio ground to the closest through-hull. In effect,
what's you're doing with this approach is connecting the radio
ground to seawater and using
a cobbled up
version of Litz wire to do it.
approach, as long as you've got the boat out of the water, is to
use the whole hull as a giant capacitor to couple your ground
energy into the surrounding seawater. You do this by
taking 3-4" wide copper strap and running it down the whole
length of the boat starting about 8" down from the waterline.
You can go all the way up the side of the bilge, if you want, as
there's no such thing as too big a radio ground. Secure
the strapping in place, otherwise you will end up with a $200
copper snake in the bilge - and tie it all together as close to
the radio as you can.
As long as
you're going to get all twisted up and have ripped the inside of
your boat apart, don't forget to tie your ground into everything
else that's metal that you can get to. Particularly good
are black iron tanks for fuel and stainless steel (if you have
them) tanks for water. Main thing, though, is keep the
ground straps as close to the hull as you can since you are
building a big 'capacitor'.
picture yourself at the top of your mast and looking down at
what's grounded in your boat, if 3/4's of it would hit copper,
then you probably will have a great radio signal.
could do what I did: Simply put in a good mobile ham radio
antenna off the stern like line stanchions and drag a couple of
zincs straight down in the water connecting the ground
wire/zincs with low inductance wiring to the antenna common
point. Granted, the radiated efficiency of an 8-12 foot
mobile antenna will not be as great as a full up backstay
installation, but I figured putting enough copper in for a
ground would break me financially at the time I was doing the
installation and when I could afford the copper, I couldn't
afford the time. Still, my cobbled up installation was
able to talk up Europe on the higher frequency ham bands with
some regularity from San Diego or San Francisco.
reminds me to mention a couple of great resources. I can't
say enough good things about
radio school. If you're thinking about a ham radio
ticket, and self-study is not your bag, Gordo's your guy.
He gives classes around the country and has probably put more
SSB radio users on HF than you'd ever be able to count.
He's just up the road from
the Baja Ha-ha starting point (San Diego) which starts
October 25th this year.
thing to be aware of is the Maritime Services Net which operates
on 14.300 MHz upper sideband. The group of hams on here is
a treat and they provide a great way for folks out in the middle
of the ocean to keep in touch, relaying news, weather
conditions, passing traffic (messages) to relatives, and what
have you. Fine bunch of folks and I've had the pleasure of
being at both ends of that; afloat and ashore. Great
to get into a long-winded discussion of sailboat grounds and pro
choices, but like anything else worth doing, there's a certain
level of complexity to undertaking a liveaboard life. Not
to mention expense. Remember, if something says "marine"
on it, figure it will be 10-100% more costly than something
which doesn't have those words on it.
shame of it all is that as the economy seems intent on
collapsing down to sustainable levels, some folks may finally
get the time to purse that sailing dream, but unfortunately,
they may not be as able to afford it now. Isn't that how
everything seems to work in Life? I have the money,
but no time, or I have the time, but no money. Dman tricky
planet, this one. If the Universe has put me here to
figure out this conundrum, I'm still hunting for the answer and
expect you are, too.
Send snip and save items to
--- end snip and save section ---
Tuesday, March 3, 2009
No, It's Really WORSE!
Maybe you're not awake enough yet to remember the little
word "numeracy". What it refers to is basic skill with
arithmetic operations and if you've got it, the
assumption is that you can cope with number concepts generally
including addition, subtraction, simple multiplication, simple
division, simple weights and measures, count a little money, and
be able to tell time.
You can test yourself easy enough: If you're a male, you'd
maybe ask basic arithmetic questions in life like:
is left if you meet 3 blondes and one leaves because she
finds you totally disgusting?
many times have you been overdrawn and how much did it cost
would be left of your paycheck if you got divorced?
much does that steak weigh? What's her measurements?
much money do you have left in your wallet?
last, but not least, is it closing time yet?
version of the quiz might be:
this guy add up to anything?
much has he wasted in overdraft fees?
got married, does he make enough to provide child support?
does he weigh so much? Why is he staring at me like
does he have so little in his wallet?
Doesn't he know he'll have to get up and go to work in the
morning? Can't he tell time?
how numeracy works. Humans are symbol processing
crazies who assign numeric values to the important aspects of
selves and mates, and then either arrive at the wrong
conclusions, or - in the event they reach the right
conclusions - they ignore the numbers anyway...
my point: At no place in the normal conduct of average
Americans is there any thought to how the underlying numbers
are being pushed around. And they are...it's just we don't
talk about it much.
example, in the "take 3-blondes and subtract 1" question, the typical male
usually doesn't question the persistence of hair color.
Trust me....a woman's hair color can change over time. Not
saying that's bad (God forbid!)...just mentioning that's an
example of how the underlying assumed fixed values aren't
really so fixed over time after all.
here is what?
meets woman (or whatever) or woman meets man (or whatever else)
the numeric values relate to assumed underlying fixed
amounts. Only the most geek-like of engineers (either sex)
would point out that even things like time aren't really
fixed which is why an extra second and a half gets added here
and there by standards agencies.
same holds true for money. (It's being constantly
So when you hear mainstream media going on and babbling around
how the stock market has hit the lowest point in 12-years,
you can take this as undisputed evidence that the
MainStreamMedia (MSM) is just as number-dumb as hormone-driven
kids in their early twenties. They universally fail to
admit that inflation is almost always eating away at the
purchasing power parity of money over time.
with me here that you had as many dollars as
the Dow in 1997: $6,763.29.
What would this be equivalent to here in 2009? The Dow
would need to be at $9,203.13 according to the Minneapolis Fed's
inflation calculator - my favorite (although most dangerous) of
tools to see the time value of money clearly.
little gas station/convenience store up in Noonday, Texas where
they have really good steaks. (Is this a great concept, or
what?). I just paid $9.99 a pound for handsome rib-eyes.
What would I have paid for the same grade of meat in 1997?
Oh, about $7.35...
So, on a
weekly closing basis, correcting for inflation (the watering
down of your money by printing more that is justified) we might
be looking at September of 1995...which would be about 14-years
ago, not the 12-years making the rounds. I haven't run all the dates
- not enough coffee for that - but you're welcome to have at
I know, I
know, that's the People's Economist being picky
again...and what's two years, anyway?
answers come to mind: Two years is more than enough time
for your 401(k) to lose more than half its value and if you
still don't think two years is a long time, hold your breath
that long and get back to me.
are showing a 50-100 point pop in the Dow this morning.
Question is will it hold? Car sales and truck sales this
afternoon might make the autos fun to watch...
the report from the Census folks on Monday that
construction was down 27.4% this January compared with year-ago
Loan Mercy? Sort of...
headline that "Citi
to allow jobless to pay less on loans" seems like an
interesting win-win. The consumer wins if they are 60-days
behind on payments...but the real payoff is for the bank:
It keeps them from having to start foreclosure activity on even
more homes, which would push home prices down even farther and
Making Off With...
wife Ruth says her $62 million 'unrelated' to fraud"
allegations against her hubby. So...OK...where did
that $62-mill worth of stuff come from, I wonder?
Cure Worse Than the Disease
rescue efforts may risk double-dip recession" says Reuters.
You mean massive government spending and higher taxes might slow
economic growth? Why, who'da thought?
Copying Cuba Department
Obama administration is pushing neighborhood health care centers.
It's almost like the Obama folks have seen the Michael Moore
and noticed that Cuba's system of health care seems to work out
Cuba would be a good predictive model for the Obama
administration? In which case, might the report that "Fidel's
follower's ousted in Cuba cabinet shakeup" might presage
some ex-Clintonistas leaving O's inner circle?
Here's an interesting deal:
"Obama ready to drop shield plans for Russians help on Iran"
says a report out of the Russian news and information service
Novosti. Wonder what's behind curtail number three?
Kremlin says there was no horse trade in the Obama letter...
oh, this is sooo frustrating.
Pain in Ukraine
The possibility of
civil strife looms in Ukraine as its financial situation
continues to deteriorate. Money's not available for
withdrawal at many banks...
Say, has it occurred to anyone but me that a global financial
crisis and this global "New Deal" talk could be leading up to a
worldwide electronic currency?
--- snip and save section ---
When Elaine and I blew out of six-figure land and decided to
'settle down' here in East Texas in late 2002, most of my
acquaintances thought I was a survivalist nutjob. I've
been polite enough not to ask them how their investments are
doing of late, but every so often I will send along little snips
with a note like "FYI" and an article link in the email.
A couple of recent examples which you can email around to your
friends include legendary commodity trader "Jim
Rogers Buys Land, Starts Farming..." or the highlighted
quote in the article "Faber
says Financial Industry to Contract Much More" which
includes this advice: "The best bet for investors may be to buy
a farm and escape from the cities, as a prolonged recession
could lead to war, as the Great Depression did, said the Swiss
national, who now lives in Thailand. "
Say, you don't suppose sending out emails like this once in a
while would explain my lack of friends, do you?
Be Careful What You
Wish For Department
Warming Protect Frozen Out by Massive Snowfall" in the
Another sign of how the green cause is being spun for political
Logan International in Boston may add a $2 'carbon tax' to
This is a fine example of how political leadership at almost
every level is trying to 'manage' the kind of massive, planetary
transformation that will be required to get resource
consumption back somewhere near sustainable levels.
The basic conundrum in the situation is that as humans start
living more within the planet's resource limits, they will be
consuming less. For reasons I can't fathom, the
political types figure if they just add a tax (or dozens) and
set up a carbon-trading system, that it will somehow solve all
problems. In other words, a lifestyle change is
presumed to be something that can be purchased
with just the right tax here and the right carbon exchange
No one seems to be willing to admit that maybe...just maybe...more fundamental reforms
are necessary. Like
sound money so that a penny saved becomes really a penny
earned, and such that a person doesn't have to enter into debt
indenture in order to live a comfortable minimalist lifestyle.
Oh well, don't get me started...you probably don't want to hear
my rant on this again. But please give it some thought.
If the whole system of interest and leverages (and constantly
devalued money) we replaced or modified at its core, then could
we get back to a condition where a couple didn't have to work
80-hours a week to raise a family?
And the Next War Is...
Reader sends this interesting idea:
"Some predictions from Shrii
Shrii Anandamurti, Baba. I don't know if you like to
receive, but in case:
China will attack India, because
of its food shortages. Only about 10 % of Chinese land is
possible to cultivate, but in India 80 % of its land is good
for farming. Now China has crises because of draught etc
China and India has also
constant competition in the border, who owns the area.."
what's ahead in global food supplies, that kind of thing is a
real possibility. Don't necessarily think it will be the
flashpoint, since the Mideast is also a tinderbox looking for a
spark, but in terms of making sense, yeah, can't be discounted
completely. Especially with India's western conflict with
Pakistan over Kashmir and the recent attacks in Mumbai...
expect this will be as popular as an office betting pool as say
baseball, but worth a ponder especially if China starts to
agitate more and depending on how flobal weather pattern changes
impact once fertile growing regions..
"Dear George, Thank you for your
most illuminating expert sharings which are deeply
appreciated. Your progressive blend of intuition and
intellect, with a writing style that makes dull stuff sound
very entertaining, makes for a magnetic read.
Yesterday you wrote about a Time
Monk potential unraveling story about counterfeit gold and a
speculative opportunity to maybe, coulda, woulda, shoulda CA
CHING. When reading this, a vibrant waterfall of golden
coins appeared to flow freely on the inner screen. Then I
opened the Daily Quote email below and knew it was the clue
that this waterfall will "raise" my "cork." It seems about
time to play with gold. The only option was then to email
Because, "consider buying some
gold commodity put options, which he'd roll into calls on a
short-term spike/panic low and then ride gold toward $1,900"
means exactly what, sir? It's so over my head, but I
intuited the value of the excellent, potential tip. What the
heck is a "gold commodity put option?" It sounds like
putt-putt hockey at Macy's. How would one even begin to play
this game well? Is there a number to call? Is 1/4 or 1/2 K
enough to enter and win the game? I realize if this possible
opportunity does manifest it'd require timely action. Would
gold falling to $650-$700 signal a GO (where ?) & BUY (how
So if possible, could you share
the short, exact, how-to-do-it explanation for the true
non-economic type? Or suggest some other wise route to
receive the needed support to enable putting, rolling,
calling, and riding this bobbing cork to a stockpile of
enough authentic golden seeds? Thank you so much for your
ongoing service toward the awakening.
me address your questions in order: First, there are two
major approaches to investing. One is called stock.
This is where a company's ownership is divided up into "shares".
Let's say I turn my shop into a small metal fabrication
operation. Hire some local folks to make something.
If I needed to raise money to expand my shop, I could
incorporate (e.g. form a stock company) and then sell people
shares in it; subject to books full of rules. Let's call
this company "Georgeco" for the fun of it.
enough people own shares, they can trade shares in my company.
If someone things "That George guy is a genius, and everything
he touches turns to gold..." they might pay a handsome fee for
shares of Georgeco. On the other hand, someone else might
say "You know, too many references to shots of el Don tequila
too early in the day...think I will sell my shares of
that's how stock trading works: Underlying company, shares
- which are just certificates of fractional ownership and that's
all there is to it.
Options on stock work like this: Say Georgeco is
trading at $10 and you decide to write a covered call option on
it. What you might offer to someone buying the option on
your stock could be something like this: "You buy a
right to purchase my Georgeco stock in 9-months for $10 a
share and I will sell that right to you for $2."
That right to buy at a future price - based on the stock going
up is a "call option". You do the deal.
Now, we go forward 9 months to the expiration date of this
Georgeco option you have written. To your horror, let's
say Georgeco has gone to $20. Since you got $2 from the
selling of your option, when you deliver the promised stock
Georgeco will have returned you 20%. The person who
bought that option from you has paid $2 for the option (and
$10 for the underlying shares) so when he 'delivers' the stock
to a $20 buyer, he makes $8.
Since you wrote the option, you have made 20%. But since
the option returned $8 on a $2 investment, the option player
made a 400% return. (See why I play options?)
now let's see what happens if Georgeco doesn't go anywhere in
those 9 months. You would still have your 20% gain
from selling the option. But, come delivery day, the
option owner doesn't have anyone to sell Georgeco shares to for
$12, since its street price is only $10. His option
expires worthless. You are not really an investor until
you have seen $5,000 disappear in an afternoon this way.
Hurts like hell, but under the right conditions, a tax-loss
carryforward against future gains (used to be a $3,000 per year
as a tax loss c/f limit) means government will acknowledge that
loss as a trading expense...but you're never really made whole
since there is inflation to be considered and so forth.
Buy a beer for a CPA sometime for more on this.
flip side of a call option (bet something will go up) is a bet
that something will go down. This is a "put"
option. Works just the other way around like this:
You sell a $10 put option for $2. Let's say Georgeco stock
falls to $5 a share by option expiration day.
paid $10 and got $2 from your option sale, so your cost basis is
put option player paid $2 for the option, but now when
the stock is delivered he gets the difference between the $8
which you paid and the $5 street price.
Now, let's talk about commodities. These are physical
markets. Remember that in stock, you're buying a piece of
ownership. In commodities, you're buying the underlying
physical stuff. In other words, come option settlement
day, if you have an option on wheat, for example, you could get
however much is in a wheat contract (5,000 bushels) delivered to your home at
the agreed upon price.
reason that options on commodities exist is not to give
speculators (like me) a chance to make money on the future price
of gold or oil. It's so that companies can lock in their
prices well into the future, thus eliminating some operating
risk for their company.
you were the head of operations for Hershey's Chocolates, for
example, wouldn't you like to lock in a certain cost at a
particular date in the future for the cocoa and sugar used in
your product? Of course! But since commodities are
an open market, if I discover as a trader that suddenly another
health benefit of chocolate is being confirmed in a lab
somewhere, I might buy a call option on cocoa or sugar...and as
demand increases, my commodity call option would go up in value.
what happened to the airlines recently? The bought a bunch
of fuel options when the price of oil was up in the $140 area in
early/mid 2008 and what happened? The price of oil
collapsed and they were out all that optioned fuel.
Options can be your best friend, or your worst enemy, depending
on how good you are.
great starting place for learning is to study Jim Rogers' book:
Hot Commodities: How Anyone Can Invest Profitably in the World's Best Market
available from Amazon.
After all that lead-in, the answer to your question about what
is a gold commodity put option should translate to something
like "George is considering a bet that gold will come
down in the short term, so he may buy a put (going down
makes money) option on physical gold."
Next thing is how to play in commodities: Call a broker.
I use JB Slear at
www.fortwealth.com. Takes about $2,000 (may have gone up) to
open a commodity account.
to playing with smaller starting numbers? You might want
to do this via stocks. So, if you thought the price
of gold was going to come down, you could open a stock trading
account with an online broker, and then buy put (going down
makes money if the stock goes down far enough) option on a gold
Then, if you sense gold is going up, you'd turn around and 'go
long' - meaning you'd bet that the stock or physical/commodity)
price was going up. To do this you might buy a call
option, or if you wanted, you could buy the stock of a gold
mining company, or if you have really deep pockets you could buy
a commodity contract for gold. Big deep pocket to play
that one, though. 100 ounces in a commodity contract for
should mention that there are so-called "mini" contracts on
gold, but if you expected to take physical delivery of the gold?
Might want to read the fine print which last I heard required
three mini contracts to take delivery of physical...so
mini's are just a paper-trade vehicle in certain aspects.
Since a single mini contract won't be delivered, these are
almost like a stock ETF in gold.
short answer is yes, $250-$500 is enough to start trading in
something... In both stocks and commodities, if you wish
to use the higher leverage of options, you need to open a
margin account. Also, despite what anyone may tell
you, do not even think about using direct margin (buying of a
commodity or a stock) on borrowed money. The reason
options are 'safer' is that while you can (and probably will)
loose all your money in this trade, or that, you can't lose your
home. On margin, however, you can (and might) lose more
than the initial money put into the trade. Not something
to be taken on lightly.
last question: I have not made a decision on whether I would
play a possible drop in gold. I may just wait to see if
that happens and then go long. Since I don't offer
investment advice, consider beginning your investment adventure
using a full-service broker. Full service guys charge
more, but they are often worth it if you're a novice.
If you do
open an account with a full service broker, you might be tempted
to open a discount online account at the same time. This
strategy called 'parallel trading' can lower your cost basis by
purchasing some shares at the full-service price and another
batch at the discount price. Frowned on by brokers, of
course, so if you do decided to 'shadow' the full-service
broker, do yourself a favor and keep top yourself about it.
If you get lucky and find a full-service guy who actually makes
you money? I don't have a problem giving doing all the
trades with the guy who got the right moves.
personal choice and ethics...
Keeping Up Appearances.
Cliff - the chief time monk from
www.halfpasthuman.com - will be on Jeff Rense's show
tonight. I'll be on tomorrow night discussing Markets in
Limbo ("How low can you go?")
Send snip and save items to
--- end snip and save section ---
Monday March 2, 2009
Bye-Bye 7,000 and
You know what the problem with being around the 'rickety time
machine' is? Knowing what happens before it gets here.
Lemme give you a couple of examples. I told you last
December that based on a combination of linguistics and Robin
Landry's then 'best count' that I expected the market to decline
like crazy and it would then put I expected there to be an
intermediate bottom between 4,600 on the low side and 6,800 on
the high side, before we get a meaningful/tradable rally back to
the 9,100-10,300 range. Well, guess what we're in the
middle of? Making that bottom.
I also mentioned to you, first
September 2008, and elsewhere since, that we would likely be
seeing 'strange disappearances' popping up as 2009 started up -
and that these would be of increasing numbers as the year
progressed. Now, as you may have noticed,
we have two NFL players missing at sea off Florida, which is
- if I'm reading the linguistics right - only the very leading
edge of our 'disappearances' meme.
So with enough 'hits' like these two recent events, the first
ongoing as soon as the markets open this morning, you'll have to
forgive me if I take a little different view of day-to-day
occurrences; mainly because many of them have already been sort
of 'pre-experienced' by reading the ALTA reports out of
No, we're not at the level of people sleeping with guns at the
ready as the 'disappearances grow' and no, the summer of
hell/squatter showdowns aren't here yet, but give it time.
Want in on a little something the time monks are willing to
share publicly? OK, try this one on --- but remember, this
is a probability only and may or may not happen as
expected...so think in terms of it being a possibility only
Ask yourself what would happen if a large financial entity - and
it could be a private mint, an ETF, or something like that - was
discovered in the next, oh, two or three weeks - to be holding a
lot of counterfeit gold that was apparently made in China?
Suppose further that the discovery happened during some kind of
official audit process and that as word spread, it was
discovered that not only were gold bars involved, but
perhaps gold coins of recent vintage and maybe some
involvement of silver as well. How would that work out?
Curiously, as I've been penciling it out over the weekend, it
might initially send people scurrying to US Treasuries and it
would drop the price of gold perhaps as low as $650-$700 before
launching to $1,900 after the shortfall of real gold
comes into focus...which is what Robin Landry's charts infer.
It would also keep a lid on interest rates since Treasuries
would be seen as an ideal safe haven. With all those
treasury auctions to fund the bailout/printout festival, the
flight of hedge managers from recently acquired metals would
certainly keep rates low and these, in turn, could be seen as
the reason for some confidence in financial markets returning
until July 18th, or thereabout.
Of course, this is all only a possibility (although I
find myself now wondering about Hillary's recent trip to
China...was she there to warn them what our plans were and not
to freak out?). Did I mention that a fraud discover in
gold would do marvels for the US dollar's value in world
markets? It would be a one-size solves all problems kind of
solution - sort of like a mini War on Terror...a war on gold.
the leading edge of it seems to be showing in a Chinese
counterfeiting story in Coin World, too...
We, we should know soon enough as this event is maybe three
weeks (or longer) out - around the equinox - which is very close
to the Martin Armstrong turn date...
So would a wild-eyed East Texas nutjob consider buying some gold
commodity put options, which he'd roll into calls on a
short-term spike/panic low and then ride gold toward $1,900?
Ah, but this is all highly - and I can't emphasize this too much
- highly speculative stuff. Until it happens, of
So, in the meantime, folks with more traditional (backwards
looking) news sources will have to be content with the usual
headlines that might proceed a crash...which as explained to
Peoplenomics readers on Sunday, is still running a damn near
perfect fit with events from through 1941...and to help you (if
you don't have the $40 to subscribe to Peoplenomics) line this
Friday up with about August 22, 1928 and you'll be in the same
I've been writing this stuff since before 1997...explains
for anyone who wants to listen (or, more correctly,
read all the
archived articles here) that yes, this really is a
Second/Greater Depression really is here.
While you're welcome to be skeptical of my work - I'm more a
cyclical economics fan; something horribly out of vogue among
formula-slinging b-schools by and large - you may have a
somewhat tougher time dismissing headlines like "Brown woos
Obama on global deal" which begins with (my emphasis added):
BROWN hopes to forge a partnership with President Barack
Obama in Washington this week, to call for a “global
new deal” to lift the world out of recession. "
If you've got an unlimited amount of time, you might want to
start watching for increased occurrences of "new deal"
references in coming months.
Of course, the modern-day New Deals may not work. Take,
for example please,
the case of AIG which has just posted a record loss and it's
79% owned by Uncle Sam.
I don't know about you, but in George Land, I'd call spending
another (up to) $30-billion on AIG something like "pissing money
down a rat hole" but that would be disrespectful. So,
instead, I'll just offer a benign comment like "My, my, how
astute of the fellows in government, don'tcha think?"
We'll keep the wink-wink, nudge-nudge between us so we can still
travel and not get on some list.
FDIC is upping its charges for insurance to banks?
Good time are just ahead, my foot.
Far more important than this morning's rather boring personal
income and expenditure figures, which we'll get to in a moment,
Warren Buffett's Annual Shareholder Letter which you can read in
its entirety here. If you have never treated yourself
to the common-sense and good humor of Buffett's letters, you
should. Either coffee or a more adult beverage is fine
because he's like the dream professor of economics that you
never got in college. Some examples for this year's
the year (2008-G) progressed, a series of life-threatening
problems within many of the world’s great financial
institutions was unveiled. This led to a dysfunctional
credit market that in important respects soon turned
non-functional. The watchword throughout the country became
the creed I saw on restaurant walls when I was young: “In
God we trust; all others pay cash.”
poker terms, the Treasury and the Fed have gone “all in.”
Economic medicine that was previously meted out by the
cupful has recently been dispensed by the barrel."
I do have one question for the chairman: I noticed that he
said "Charlie and I are equally enthusiastic about our utility
business, which had record earnings last year and is poised for
future gains." After the attack on gold, and the summer of
hell/collapsing trade, who's gonna keep their lights on?
Personal Income and
I've always been a fan of the personal savings rate. I
figured it was a pretty good measure of how Americans were
doing. But that number lost its glitter for me a couple of
years ago when the federalcrats decided that Ooops! Due to
house prices, flips, and refi's, they would no longer be using
the same set of calculations (OK, scribbles, then) to mark up or
mark down savings based on how your home's street value was
declining. To some folks at the time it seemed like
a good idea...and in terms of "hiding the truth in plain
sight" it has been a marvelous move.
Who, besides me, would point out that for a huge portion of
America the "savings rate" has been at least -10% annually for
the past 2 years? If you doubt that simple assertion, go
back and look at home prices in your neighborhood from a
mid-2007 newspaper and compare them with yesterday's paper (if
your local newspaper is still in business - so many are failing
lately). And then pop open that 401(k) statement from 2006
or the first half of 2007 and compare it with the quarterly
confessional which should arrive in mid April. That ought
to end some of your questions.
But enough of the editorializing...let's stick to the
government's script on this stuff and put aside the reminder
that prices don't go up - the bankers just water down the
purchasing power of your money - a game that's been underway
since, oh, when was the
Federal Reserve Act passed? 1913, was it?
Well...one more point then. The
Fed has updated its 'inflation calculator" to include 2009.
So you can see for yourself that $100 in 1913 has been watered
down to the point where it takes $2206.06 paper
whatever-they-are's in your wallet today. Your dollar
today has lost 95.46703% of its value since the bankers got hold
of the country's money.
OK, keeping all that in mind, here's the script:
"Personal income increased $44.8 billion, or 0.4 percent,
and disposable personal income (DPI) increased $183.0
billion, or 1.7 percent, in January, according to the Bureau
of Economic Analysis. Personal consumption expenditures
(PCE) increased $56.4 billion, or 0.6 percent. In December,
personal income decreased $24.0 billion, or 0.2 percent, DPI
decreased $17.8 billion, or 0.2 percent, and PCE decreased
$101.2 billion, or 1.0 percent, based on revised estimates.
Real disposable income increased
1.5 percent in January, compared with an increase of 0.4
percent in December. Real PCE increased 0.4 percent, in
contrast to a decrease of 0.5 percent.
No, I have no idea how real disposable income can increase 1.5%
in January which would pencil out to an annual increase rate of
something like 11.9% if you take the December and January
increases and annualize them. Have you gotten a huge raise
lately that you didn't mention to me, or are Soviet-style
statistic in play here? Maybe if you don't have a house
headlines about 14" of snow expected in the Northeast.
Forgive me if I treat this a bit brusquely, but isn't this
The headline this morning in the Washington Post is that "Hillary
Pursues 'Comprehensive Peace' in the Mideast." If I
had taken my 'cynical pill' this morning I'd suggest chasing the
Easter Bunny would make as much sense. "Gaza
aid and peace must be linked: Clinton" Like money is
going to make the Gaza attacks all better? Like the people
in Gaza will just forgive and forget and lay down arms?
Can someone pour me one of those?
--- snip and save section---
A very short Coping section today... just some items to ponder:
Just struck me as curious...
Well, off to have a crown banged on this morning - see you
tomorrow - or (hand me that dart wouldja?) 633 points down from
Someone liked the Saturday report written from the standpoint of
a visiting alien..
"What's sad about that Alien
piece you wrote, is the fact that humanity is so
sociologically conditioned and subservient to laws that herd
us outside or inside of prison bars, we conform out of fear
of retribution or to be rewarded and, rely upon others in
the same boat, (who perhaps have 'seemingly' better seats)
to do what could be done by one's self ... that most humans
don't even know who or what they are. Thus, humanity is
Alien to it's own planet.
Humanity, has lost it's
identity. - But like all other creatures, once this is
realized, fear turns to instinct and civil unrest within the
colony ensues. Rebellion of the Old Paradigm. - Imagine what
would happen if a colony of Bees realized the Queen of the
hive were NOT a Bee. (You may wish to search "Colony
Collapse Syndrome" - That's happening now in nature.)
Even the Earth herself, is
rebelling against the Old Paradigm. Honey Bees are dying
off, Bats are dying off in New England and the disease is
spreading across Ohio and West Virginia. No wonder the Earth
is trembling, quaking and heating up ...
If not to destroy the Old
Paradigm, then those Energies From Space are from another
life form who wish to reside here once humanity is gone.
Perhaps Planet X (Nibiru) is coming and the Annunaki need
more slaves and yet another place to live. - See the
Samarian Story at google.
Sadly, as long as humanity is
doped up and tuned out to the truth, we haven't got much of
a chance to defend ourselves, either way."
why I get up and write every morning...
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--- end snip and save section ---
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.