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typos are fixed by 8:30 daily
April 11, 2009 17:35CDT
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Show Delayed another couple of weeks!
- details when available...
Well, maybe it's not a reminder since I don't know if I
mentioned it before, but Cliff and I will be on Scott Stevens
new radio show on the Genesis Radio Network tonight from
10-midnight Eastern, 7-9 PM Pacific and 9-11 PM here in the
Note to Scott Stevens: Send me the where to listen live
link and I will post it!
Failure, Apparently, IS an Option
Word from the FDIC is that another couple of banks have gone
through federally overseen banking failure. One is the
New Frontier Bank of Greely, Colorado which you can read about
here. The other is Cape Fear Bank of Wilmington, North
here). Then, if you hit
the FDIC's failed bank list, you can see that so far this
year, 23 banks have failed. Now, as I look at the
calendar, seems to me that we're about 15-weeks into the year.
That pencils out to about 1.5 bank failures per week, or
extended through the balance of 2009 would put bank failures at
(gulp) around 80 banks.
Our next stop in caffeine-fired Saturday morning ponderings
would be to ask: "So what was last year's number, and would the
current run rate annualized be better, or worse, than last
Well, last year, we had 25 banks fail. Going back
another year, to 2007, we had only three banks fail.
There were zero closings in 2006 and again zero in
That's not the whole story; it never is in statistics.
Figures beget questions.
So in the first half of 2008, what was the failure rate?
Just four banks. Things didn't really start to
popping until the second half of the year. In the second
half of 2008 we saw 21 banks fail, which is less than
one a week. So, out first observation won't be the
alarmist-sounding headline that "Bank failures are running more
than 300% compared with last year" - which would be true
Instead, we compare the run rate of the second half of
2008 with the first half run rate of 2009. Closing
21 banks in 26 weeks back in 2008 means closing eight-tenths of
a bank each week and an annual run rate of...(inserting more
coffee here)... 42 banks per year.
Since our run rate (annualized) here in 2009 is running a shade
under (say, a cheese sandwich under), we might project that bank
failures will be up 89.84% this year if 1) the way into recovery
works out anything like the way into Depression 2 and if 2)
these are really big enough numbers to mean anything.
If it's been a while since a stats class, I won't bore you, but
for a universe of 'n' you've got to have a big enough
sample size or you just find yourself measuring noise and
outliers. Still, them
Swans will beat your portfolio up whether they should
be out there or not. The nature of Black Swans, I suppose.
If you don't own a copy of The Black Swan: The Impact of the Highly Improbable,
your world may be, how do I say this? Statistically
impaired? Yeah, that'd be close.
Not to rain on your parade and all, but if I had a 401(k)
and if I was expecting the market to rally up toward
either the 1) 9,600 level, 2) the 10,000 level, or 3) as
high as the 11,243 level, I'd just be looking at worse things to
come in the fall and be selling into strength. No, this is
not investment advice, just something for you to think
Had a longish and curious email from a reader who took me to
task for my comments on the market seeming to vary by season
along a predictable path. Essentially, he asked me if in
the interest of disclosure why don't I put up a 'batting
average' on my thoughts, and in particular look at my pattern of
bullish in the spring and turning bearish by late summer.
It's an interesting idea, but one (unfortunately) I don't have
time for. For openers, I have so much else to do that it
would fall somewhere down around polishing the lug nuts on my
pick-up on the priority list. If I was going to do any
kind of statistically 'justifying' I'd be doing it on the web
bot project which although it makes all kinds of mistakes, I'd
note that this week's pirate case is a huge bot hit as
was the Obama administration talking about injecting pollution
into the atmosphere...both of which were presages in multiple
linguistic reports, as subscribers to ALTA 909, and 1309 already
But here again, I'm not interested in 'justifying' anything.
After questioning the veracity of my reporting on 'them winds'
and such, then wondering if I was a part of the 'disinformation
network itself' the challenging reader wrapped up with:
"You could easily dismiss these allegations by posting, in
response to my observations, one of your very nicely done
"charts" or "graphs", truthfully assembled from the actual
facts regarding those predictions and trends in your
"sensationalist" commentary, of course, setting the whole
controversy to rest. You can consider this a challenge, if
I don't. Bait & time sink is where I'd slot it. As
to the spring versus fall change of tone/emphasis? Anyone
who has studied markets over a multiple years knows that the
best (reliability) of rallies occur it's in the spring with a
low prior to Easter and exiting prior to the Indy 500. And
the dumps, when they happen, cluster in the late September to
Moreover, I've been talking about my 'spring rally' expectations
since December. If you want to compile your own stats,
The federal budget deficit numbers are out.
$192.3 billion deeper in debt for March. While the
administration is whistling in the graveyard at $1.75 trillion
deeper in debt, the March run rate annualized would dig a $2.3
trillion deeper hole, and oh, by the way, if the economy does a
$14 trillion GDP this year, that would mean we're spending what?
Something like 16.4% more than the whole country makes all
Gotta love those bankers and 'too big to fail' types.
As Colombo used to say in the TV show..."There's just one
bothering me mam..." Isn't failure still an option?
Speaking of Peoplenomics subscribers...got a real treat in the
offing for tomorrow's report. My 'consigliore' has been
generous to write up his whole model of how various cycles of
history interact and we'll be posting that in Sunday's report
(if he keeps on writing, LOL). Any time a lawyer/CPA who
has been part of the old Colorado Long Waves discussion group
offers to pen the Magnum Opus on cycles, it's got my attention -
should be a good one...
or Some Other Label?
You saw where
a group out in Stockton, California is planning an armed citizen
militia, which might be activated and patrol the city if
police get laid off in numbers due to budget crunching?
Speaking of which...
"What's Astroturf's new meaning," you're wondering?
Well, according to TheBondDude (who is seldom wrong,
unfortunately) it is "The
name for mass corporate marketing disguised as grassroots
efforts by individuals..." A link related...
wild fires in North Texas have burned down two towns,
although there's some hope in today's forecast that winds will
die down so fire fighters can get the upper hand. A couple
of readers have asked about local impacts in the area of our
ranch. Nope - we're about 180 miles southeast of where the
fires are, but thanks for asking.
Pretty substantial damage from
storms going through Tennessee last night, too.
This is going to change often enough over the weekend, that the
best I can do for you is set up a link to the latest 'pirate'
news sorted by date off the Google news search tool...
here for it.
This time it's 9 dead, 31 wounded.
Has a ton of emails on my "Chemtrails go mainstream" report this
week including a note from one of the authors of the USAF 's
Owning the Weather 2025 Study. Won't tell you who
but I can share some interesting concept stuff coming in from
lots of folks...that should hold on simmer till Monday.
Busy weekend ahead...so drop by Monday.
Around the Ranch:
The Case of the
"George - get over here!!!" It was a mighty excited
sounding Elaine on the intercom from the house just after I
posted yesterday's column.
"Hmmm...maybe breakfast is ready early," I was thinking, already
moving that direction.
But no, arriving at the north deck I noticed Elaine half
cowering in the kitchen as she blurted out "George there's
something in the cat's toy bag! I started the vacuum
cleaner and it moves! Get it out of here...whatever it
So I carefully picked up the cat's toy bag - about the size of a
regular paper grocery bag, but made of blue fabric and filled
with an assortment of yarn, string, catnip-stuffed toys and what
have you, which the cats will sometimes indicate they want us to
dig out to play with them. And sure enough, when I picked
the bagup, it did move...so I threw it out on the front deck.
That was followed within seconds by Elaine throwing two cats at
the bag and trying to interest them in finding out what the
mysterious contents were that had been moving around each time
the vacuum was started...and which had seems to move in my hand
Upon landing at the bag, however, both cats were like
completely bored with the contents. Pusscilla simply sniffed
and wandered off wondering "What's that doing out of it's
Zeus the Cat simply gave me his best "And your point is?"
look. It was embarrassingly un-feline behavior.
"Might odd," I found myself thinking. "Wonder what's in
there if they have no interest in it? It moved about like
a large mouse would...but why no interest from the cats who
ought to be going nuts at the prospect of a free dinner....maybe
it's a lizard?"
So I carefully dumped the contents of the bag out. No
mouse, no bird, no rat, no lost squirrel. and most troubling, no
Intrigued I then felt the bag with my hands and again, nothing.
I stomped on it a few times with my food, just for good measure.
Nope, nothing in there; no squishing sounds. Just the pile
of cat toys that I'd dumped out.
And then it hit me: In the midst of the cat toys was a
partly unwound spool of thread. It was a like gray and
about the same color as the vacuum. Blended in almost
perfectly with the weathered wood on the porch deck, too.
"Aha! I think I've found the culprit!"
Sure enough, this nearly invisible thread led right back to the
vacuum cleaner, where each time Elaine turned it on, the thread
would pull, but being weak, after just jerking the cat toy bag,
it would break, giving the illusion that something was in the
bag six feet away. And, the reason I had felt something
was that I was walking away from the vacuum to toss it
out on the porch.
We had a good laugh over it, but it's an important lesson in how
human perception really works. Often we see effects
and jump to conclusions about causes based on our own
individual collection of experiences as to causes. Out
here on the ranch, it's hard to go very long without finding
some little furry or reptilian creatures about, so Elaine's jump
was understandable. Our collection of house-defending
lizards is out already, and the bag acted like one of them might
act...and the odd heat-seeking mouse will sometime sneak indoors
despite the presence of the hairball generators.
Now that I am reminded how people look for familiar causes, boy,
has this given me a who new genre of pranks to pull on
you-know-who-but-don't-tell-her LOL...see you Monday morning...
Living Well, In Spite Of....
In many of the weekly Peoplenomics
reports, I pick a single topic and delve into it in some depth.
But, this weekend we have a lot more ground to cover than usual, so I
got to thinking "What's the overarching concept that ties all this
together?" What's on the plate? Well, for openers, there's
the usual "Which way for the market, next?" Following that we've
got a major web bot / predictive linguistics hit developing with
muckers/amok and the developing sense of 'surreal' that will get to the
point of paralyzing people sometime over the next year or so.
Closely coupled, there's the matter of getting control of your
'framing/reference' systems that either confine or liberate your
thinking, and following all that we get into timing the purchase of real
estate in these record low rates, a fine point or two about gardens, and
as it all that isn't enough, I'll fill you in on the alpha test plans
for the 'crop circle spinning software' that my friend Cliff has been
working on, and which you, if all goes according to plan, will be able
to take part in testing. So as I scratched my head this morning I
got to thinking "What's a broad enough headline to take in this wide
range of topics. And then it hit me: This is all about
"Living well, in spite of..."
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"Live on $10,000" Updated
What? You haven't ordered the ebook "How to Live on
$10,000 a year -- or less"? Suit yourself. We're all
going to live it shortly, anyway. I just thought you might
like a heads up by reading about how to do it before you get
pink-slipped. But, suit yourself OR visit
www.liveontenthousand.com or, click one of the following
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 April 10, 2009
This being a holiday for some of the financial markets, such as
the New York Stock Exchange, we can raise our heads from staring
at monitors long enough to look at the general condition of
'life on the rock' to get a sense of things while waiting for
the financial market rally to continue next week, as it seems
prone to do based on what may be the bottom (short-term) around
6626 a few weeks back. One reason? Financial stocks
are doing well.
Not just 'well' but very, very well.
WTH? How come banks can't give their TARP money back?
'Them winds" often a theme in linguistic reports are back with a
as hurricane force winds in parts of Texas and Oklahoma have
been driving wild fires; lots of Texans getting 'red flag fire'
emails from friends earlier in the week saw it coming.
Farmers in ag areas are usually pretty conscious of weather
forecasts when touching off
and such, but it only takes a small fire to cause huge problems
under certain conditions.
A little deeper into the South, at least
three people have been
killed over in Mena, Arkansas as a tornado ripped through the
Sabotage is thought to be the reason for the phone system outage
in the Bay Area on Thursday. This one is troublesome
to me, especially since at least at our ranch in East Texas, the
net is slow as mud this morning.
The pirate 'drama' continues to build in MSM. The
hostage tried to escape, apparently, but more to come as
this thing unfolds at glacial speed.
Guess who is asking for another $83.4 billion for the
military? Well, at least it ain't banks - but just
hang in there, we'll see more of that, I'm sure...
State funeral in Italy today for earthquake victims from
earlier in the week.
In France, the
parliament has turned down a measure which would have allowed
'authorities' to turn off internet connections of people who
Meantime, the conficker virus continues to make headlines over
The Topology of Belief
A tip of the mug this morning to the LA Times which has a
delightful Annie Jacobsen 'Back/Story' feature which is a mighty
fine read titled "The
Road to Area 51". You may enjoy it.
I mention it because of the letters I get about my writings on
the world of the really (and I mean really) weird /
off-the-beaten-path kind of subjects. A little discussion
of my outlook is in order, this being a semi-holiday and all, since people on both sides of the
'weird science' issue offer admonitions to me this way and that
trying to correct or coral me.
Yesterday's email was a typical mix. One email laid into
me pretty good about 'losing credibility' when I bring up topics
like Chemtrails. In my own defense, on this one, I have to
say that while it's true that some reported chemtrails
are no doubt just contrails, there's also a lot of
evidence that the military has been engaged ain things like
chaff experiments over areas inhabited by humans, and that some
weather modification patents have no doubt been tested, since we
have only 15-years before we arrive as 2025.
And what is so special about 2025, you're wondering? Quite
some time back, the US Air Force published a very interesting
paper (it's in the public domain) titled "Weather as a Force
Multiplier: Owning the Weather in 2025." Now, I
don't know about you, but seems to me that it's reasonable
to expect with only 15-years to run, that the military might
and maybe even should be looking at such measures.
And with yesterday's talk by the administration about far-out
sounding ideas (deliberately putting pollution into the high
atmosphere is far-out, right?) to start building a continuum
which has, as its major axis, scaling from "t'ain't no such
thing" on one side all the way over to "OMG this really is a PTB
plot to off humans" on the other makes sense.
Let me take a couple of minutes and cobble up a drawing that
explains my 'framing system' because it's a really useful way of
at least 'knowing what you don't know' and you can use
this approach to almost an exploration of 'unknowns':
As you can see above, what I've done is said "OK, chemtrails may
or may not be true as a deliberate phenomena. Let's
scatter-chart the reports and see if we can infer
something by putting the data points up in some kind of
I start with a near 100% belief that 'chemtrails are crap" but
as the data continues to flow in, the scatter plot starts to
look a little different.
Most people don't pay much attention, at least most folks I've
dealt with, on how their thought processes are bounded by
belief sets. While most folks sit around and try to reduce
their world to black and white or true/false statements, that's
really an artifact of living as a 'thought-controlled' person.
Whether it's an absolutist set of parents, a religious doctrine
that denies personal investigation of the truth, or a
socioeconomic group (e.g. gangs, just for instance), people that
don't look at the world as a grayscale menagerie are missing a
significant opportunity to be more in touch with 'reality'.
Reality ain't simple stuff.
This, by the way, applies to all kinds of human endeavors and
here's a shocker for you: The so-called Bell Curve (normal
distribution) of Intelligence (as in IQ tests) is not a curve at
all. Sorry to say, it's a number of curves, which when you
rotate or line them up form what? A topological map of
how a person thinks.
This is why you can have some people who score high in math and
low in English, yet others will fail basic fractions but turn
into Shakespeare Lite, given a pencil. Both may measure
using a single-axis tool, but the topology of their
thinking will be vastly different. The math whiz makes a
fine engineer, while the writer would do better in law or
psychology; you wouldn't want to fly in an airplane designed by
This is why when some asks me "What do you think about "X"
I look at them with a kind of silent stare because most times
they are trying to find out if I am an absolutist and agree with
their own absolute/limited view of things. Odds are pretty
good I won't.
Not that I will disagree with them entirely, but my topo map
will be different than anyone else's because I've collected a
different set of scatter points on my chart about [whatever the
Back to the inbox for a second: While one fellow was
telling me, in so many words that I was an idot for even
considering chemtrails (despite the patents, AF 2025 study,
and the Obama administration's 'floater' this week), another was
sending me information about how Arcturians were channeling
important information about crop circles.
Once again, I go putting points on a scatter plot. From
the absolutist engineer standpoint, 'anyone who hears voices in
their head is nuts' would be the left axis.
And perhaps, these off-planet encounters via channeling should
go over to the extreme right. So the data distribution
would be more a "U" shape, with a much higher l;eft side of the
"U" because few people actually hear/channel/speak-in-tongues.
But this is where this data-mapping works wonderfully. If
someone says "Do you believe in Zeta's? " the answer would be
something like "They, and the Arcturians, are a low-probability
on my topo map" but most wouldn't follow, so I thought I'd try
But on my scatter plot, what they don't know, is that one of the
biggest bulges up on the right side of the chart is Julian
Jayne's The Origin of Consciousness in the Breakdown of the Bicameral Mind. Seems voices in the head are (high probability)
something to do with how the two halves of the brain
communicate. The sheath between the two hemispheres has
not always been the same, it seems, and when a religious book
refers to 'hearing the voice of God' it may very well be a
communication state between brain halves with one rational side
'hearing' the side that has been suppressed and has been in
'free running' mode.
So here again, when someone says to me "Don't you think people
who believe these Channelers are nuts?" is not really seeking my
research. Instead, they are seeking my assent or
endorsement of their view, which in case you haven't noticed
yet, I'm pretty stingy about. Throw in books like DMT: The Spirit Molecule: A Doctor's Revolutionary Research into the Biology of Near-Death and Mystical Experiences,
and even better:
Supernatural: Meetings with the Ancient Teachers of Mankind,
and you're deep into grayscale. Not ready to agree with
those who are topolo9gically impaired and won't explore other
possibilities than the closed decision they've already made on
the one hand, but not ready to commit to Zeta, Arcturans, Zeta's
or whatever's on the other, but at the same time recognizing
that speaking-in-tongues is an observable fact, and DMT is pure
science, as is Ray Moody's late 1970's classic Life After Life: The Investigation of a Phenomenon--Survival of Bodily Death.
I spend a fair bit of energy putting dots on this particular
scatter plot since we're all going to go through that door
sometime. I'd just like to collect as much data before I
'take the last plunge' so to speak, and would advise everyone to
consider it, too. Since the physics crowd is pretty sure energy
can neither be created nor destroyed, I often find myself
wondering what will happen to the ball of thoughts that is me
once 'time's up'. Intriguing - and unavoidable topic.
Some readers already seem to "get it" on this life as grayscale
stuff - and see the same 'dance' as me:
"Bravo to you for "Chemtrails Go
Mainstream II" in your column of 4.9.09! You'll undoubtedly
get a lot of heckling from the Enablers who are "concerned
for your sanity" and in a fevered rush to reassure you that
you are seeing only water vapor. Some will even tell you
that it's always been this way. Neither will be able to
offer you any of their beloved Scientific Proof to back up
It's nice to see that you
recognize that there's something strange going on right over
our heads and I'm glad you're making the connection between
the trails and the Administration's trial balloon of
"Climate Engineering." Are you familiar with Kay Bailey
Hutchison's efforts of a couple of years ago to establish a
federal Department Of Weather Modification? Little by
little, the story presents itself, does it not?
I read your updates every day
and always get something useful out of them. All I can
do is commend you for your work."
No tin hat necessary, just a good framing concept of scatter
Well, gosh, this is getting on in length and style of being a
Peoplenomics report, but I really didn't mean it to be so.
But if, after reading this site for a while you get the idea
that "Oh, gee, life really is complicated, then, isn't it?"
The answer dear reader is "You bet!" And I'm offering you
this topology mapping concept because I've found it useful, and
you may as well.
(Damn that was serious!)
Send snip and save items to
firstname.lastname@example.org along with a large sack of $100 bills, some
coffee tree seeds, and oh yeah, some peppercorn bush seeds,
--- end snip and save section ---
Thursday April 9, 2009
So here's an interesting question for you: Suppose...and
this is just supposing, of course...you had been running a
decade or longer program of throwing mixtures of chemicals into
the upper atmosphere in order to reduce global warming, and
maybe...just maybe...again, speculating here, to keep people
from seeing too much of what's going on in space. How
would you transition the concept into the public mind as being
'acceptable' once it became obvious to enough aware people who
surf the internet, ifn' you were the PowersThatBe?
I give you the answer in a headline: "Obama
looks at Climate Engineering" mentions the idea of, and I
quote from the article in the WSJ's version of the story for you
(but you gotta
read the whole thing by clicking here) "shooting pollution
particles into the upper atmosphere to reflect the sun's rays."
Meantime, the "Drop
in sunspot activity no cause for concern-professor" says
down in New Zealand, but I'd point to the 11-year solar cycle as
being linked (like it or not) to climate events here on the
I reckon it's possible...and I just hold out this as a
possibility that by the time government gets around to
'solving' a problem, it may have already passed its zenith for
this cycle. Or, on the other hand, once we get on the next
peak in solar activity, 2013-2014, or so, then maybe this
"Son-of-chemtrails" stuff will save whoever is around then.
And, since most of the science indicates that major solar flares
happen past the peak of activity, we might indeed see things
like power disruptions from solar flares - or worse - on the
backside of Cycle 24.
Nevertheless, what's going on now bears close scrutiny, since
the PTB are slowly inching this climate control / weather
modification agenda out into the public/,open, but it'll likely
be done in such a way as to leave the leading-edge thinkers,
who've been talking about this for years marginalized as nutters
and cranks. And who knows, maybe if the roll-out of what's going
on already is smooth enough, no one will notice the few
leading-edge types on the 'net who should be saying right bout
now "Told yah so!"
We just noticed, though, didn't we?
Markets Set to
Today I figure would be a dandy time to enter the stock market
on the long side. (More in the Coping section to
follow.) For one thing, the RBC-CASH index is
showing a solid improvement, which compared to the past couple
of months verges on giddiness:
"Reversing seven months of crumbling confidence, Americans'
economic enthusiasm rallied this month, according to the
most recent results of the RBC CASH (Consumer Attitudes and
Spending by Household) Index, which posted its first
significant improvement since September 2008. Overall
consumer confidence advanced 30.1 points, bringing the RBC
CASH Index to 38.3 in April, compared to 8.2 in March.
Consumer sentiment was bolstered by a 58.3 point increase in
Americans' expectations for the future. Americans' attitudes
about current conditions and investing also increased in the
past month, but they continue to worry about jobs."
Oh sure, there will be bumps, but the overall tone of 'plain
folks talking' seems to be improving along with the
weather. Maybe we all go into something of a fugue due to
vitamin D shortages in the winter. If you see a report
anywhere on the link between nutrition and portfolio results,
I'd sure like to see it.
On the other hand, longer term there are also clouds on the
horizon. For instance, there's a new Rasmussen poll out
today which says "Just 53% say Capitalism better than Socialism"
and the report continues:
latest Rasmussen Reports national telephone survey found
that 20% disagree and say socialism is better. Twenty-seven
percent (27%) are not sure which is better.
under 30 are essentially evenly divided: 37% prefer
capitalism, 33% socialism, and 30% are undecided.
Thirty-somethings are a bit more supportive of the
free-enterprise approach with 49% for capitalism and 26% for
socialism. Adults over 40 strongly favor capitalism, and
just 13% of those older Americans believe socialism is
this attitude shift with the SEC considering revisions to the
uptick rule and I think you've got a good shot at 10,000 before
July or August before things turn south again in the fall.
Commission decided to re-evaluate the [uptick rule - g]
issue due to extreme market conditions and the resulting
deterioration in investor confidence.
"Clearly, the practice of short
selling has both strong supporters and detractors," said SEC
Chairman Mary L. Schapiro. "Today, we begin what will be a
very deliberative process to determine what is in the best
interests of investors."
mood, uptick rule, jawboning, and vitamin D rising...what's not
that you mention it, there is the matter of the balance of trade
figures out today.
The U.S. Census Bureau and the U.S. Bureau of Economic
Analysis, through the Department of Commerce, announced
today that total January exports of $124.9 billion and
imports of $160.9 billion resulted in a goods and services
deficit of $36.0 billion, down from $39.9 billion in
December, revised. January exports were $7.6 billion less
than December exports of $132.5 billion. January imports
were $11.5 billion less than December imports of $172.4
January, the goods deficit decreased $4.3 billion from
December to $47.0 billion, and the services surplus
decreased $0.4 billion to $10.9 billion. Exports of goods
decreased $6.5 billion to $82.2 billion, and imports of
goods decreased $10.9 billion to $129.2 billion. Exports of
services decreased $1.1 billion to $42.7 billion, and
imports of services decreased $0.6 billion to $31.8 billion.
see a really butt-ugly chart? Try this one:
end of the world, maybe, but you can almost see it from here if
you look closely...
Meantime, there's even a glimmer of hope that
the retail sales decline rate is slowing..
"V" is for
It came to me in a flash of insight on Wednesday afternoon:
No matter how much money the Obama administration, the Treasury,
and the Fed, pump into the economy, if consumers cut back
spending enough, then we're all screwed and no amount of
printing will kick-start the economy.
So I called Cliff up at
www.halfpasthuman.com and began the conversation by asking
"You know why the economy is going to continue collapsing?"
His answer was something to the effect "Gee, because you can't
capitalize debt?" Oops, he's already there.
Still anxious to share my
epiph, my next call was to my consigliore: "Hey, you
know why this Second Depression augurs in anyway this coming
fall when another leg down should get rolling? Velocity!"
His answer was almost like Cliff's: "Yeah...that's been in my
model since 1979...the only question is about the timing of
when the policy decision will be made to kick inflation into
gear to bail the economy out because bouts of inflation usually
only last four years versus deflations which go a decade..."
Hmmm. Must be preaching to the choir. If you have a
less smart group of friends, though, you might point to the
story we talked about yesterday (about credit card use
falling like crazy) that's being reported today under headlines
Credit Card Debt Down Almost 10 Percent" and dazzle your
friends with a snappy short discourse on what happens when
velocity (collapsing transaction counts) overrules policy
Let me know how many folks you put to sleep.
From cartoonist Rebecca Price of
Obama administration is going to try to push through a new
Wait! Is this another example of government solving the
problem after the fact? With a falling economy here in the
US, and some reports of border traffic of people returning to
Mexico, what would make sense is 1) finish the fence and 2)
enforce existing laws, seems to me.
But how often can the lobbyists line up the right combination of
"social(ist) correctness" with the
corpgov agenda to fill as many jobs as possible with low-paid
imported workers? Wrap immigration loosening up in a
McMerica flag and everyone oughta salute, right?
Oh a few will whine: The average middle-of-the-road fellows like
me who come and go across the nation's borders with a passport,
searches, laptop confiscation possible, and so forth, while the
folks who criminally trespass are likely to soon get a wink &
nod and a "Oh...that's OK..".
WTF people? Am I the only one who remembers the
14th Amendment's equal protection concept? Or,
in our headlong rush into political correctness have we made
some people more equal than others? I don't recall
seeing Danish textbooks being used anyplace in America, don't
recall German or French being used outside of language
classes, either....I'm just saying reread #14...
Then again, there may be a hidden corpgov agenda of 'making
work' in all this. Do I to recall that Canada went through
a whole bunch of sign-making, book printing, and teachering to
implement bilingualism....so yeah...OK, maybe it's all a
make-work deal and we should support it.
Hold it! Have I just stumbled into a link between the
sometimes ungentlemanly way hockey is played and how South
American gangs operate in the US? Write me a report on how
language minorities act out violence....and throw in some
examples from the recent immigration wave in Europe as
contributing the the problems of France, too... The mind
boggles. Where was I? Oh yeah...
--- Snip and Save Section---
"So you are really doing it, huh, tubbo?"
Crap. My sidekick, Zeus Fleaster, the independent-minded
pure black cat had gotten to the computer first this morning and
was already pre-sorting my emails for me.
"Says in your brokerage account that you've bought a couple of
September $25 silver call options in the commodity account.
Didn't we talk about this?"
Indeed, we had. I'd explained to the cat that I thought
silver, along with gold and oil, might do pretty well in a
bounce which I expect into about the middle of summer.
I shot back: "You can't be a wimp all the time, Zeus.
Sometimes you just gotta go for it. Look how things are
lining up: The ALTA/predictive linguistics work says
there's a serious period of 'happy-talk' due right after Easter,
there's the usual just-before-Easter low being done this week
maybe yesterday was it, and then you've got a generally
improving public mindset. You
see the NY Times poll this week? And Robin Meade was
talking about a new CNN poll which showed less pessimism, not
I figured that would shut him up...darned nosy cat, anyway.
"Look, stupid biped...you've got a little over what, 76 trading
days till these things are dead meat and you are gambling that
the price of silver will more than double? Are you on
crack? If you'd spend less time eyeing Ms. Meade under the
thinly-veiled guise of trying to find a correlation between her
jewelry and market direction, and more reading of your email,
you'd probably be a lot fatter in the purse. Here, look at
this email that came in overnight:"
From Oklahoma fly over country.
Saw an article stating that each of the prior five market
days someone/company has placed orders for 2 million ounces
of delivered silver. Sounds like a lot. I found a number
representing the yearly production of silver in tonnes.
Converted it to ounces [12 ounces per for silver].... Then
divided it by 10 million ounces of silver..... Gave a
percentage of just over 1% of the yearly production.
This articles presentation seems
to indicate that this is a huge amount of silver. Ten
million is ...but it is not a huge amount of the yearly
Gotta watch those articles that
could lead to irrational conclusions... Check the
numbers........and satisfy your curiosity about the
importance of the story as reported....
Read you every day...."
"And as if
your silver moves aren't crazy enough, you got a call from JB
and he wanted to know if you were gonna pull the trigger on some
oil and gold calls this morning. Have you completely
frigging flipped out? I haven't seen anything this crazy
since my last bout of distemper..."
times when having a talking, computer-savvy cat as an assistant
is a bother.
here, Zeus...your portfolio was only up because you lucked out
on your entry into
Reckitt Benckiser Group...why'd you buy them, by the
got something you're seriously missing," replied the furry
feline "A good product line, predictability, and besides, they
own D-Con and I know that vertical inside-out."
cat had a point, but I wasn't about to back down on my trades.
fur-face, far as I'm concerned, buy& hold is dead and silver,
which in case you haven't noticed, is largely a by-product and
with copper and some of the other metals down, I figure it's
bound to go up. Besides, the Gold-to-Silver ratio is still
way outta whack, too..."
it, you're going outside until I get some fills on the gold and
oil calls...go chase a mouse, or something."
more mice than you catch doubles, salad-breath. I know
where the catnip is planted up in the garden..."
don't forget to log out...and WHAT THE HELL is the deal with
your new email address
running some personals in the Rat Report...nothing you need to
Not again...am I gonna have to start putting saltpeter in your
slams as indignant cat exits)
being "National Correct George Day" I have to note that Robin
Landry's comments are not distributed to his retail
clients but to other professionals in the industry.
He actually talks to his retail clients (any more that's
something of a rarity...) Anyway, the notes when posted
here are for colleagues in the biz.
A bunch of
things popping off in Outlook which may be of interest, and no,
not just my getting a crown installed at the dentist's office
this morning. No, I was thinking you'd want to be reminded
New York Stock Exchange is closed for Good Friday tomorrow.
Next market holiday is Memorial Day May 25th...kinda early this
A check of
the Google news search tool pops back with 4,350 returns when
"good friday closings" is tried. You've results may vary,
but the main thing for most is the to remember to hit the bank
if you need some cash for the weekend.
column will be a bit shorter than usual, most likely, unless I
go insomniac again.
Outlook item: Taxes to be in the mail by next Wednesday.
Annual returns and quarterlies...
Wednesday April 8, 2009
Don't look now, but things just got worse; in fact very much
worse. I don't refer to the Italian earthquake
which may have killed 250, nor do I refer to
the U.S. electrical grid being "penetrated by spies".
although that's all worrisome stuff, and a bummer, and all that.
But no, it's not my candidate in either event for 'disaster of
the year' because that shapes up to be in the field of
I refer specifically to the collapsing consumer debt figures
released by the Fed on Tuesday afternoon. As my friend Jas
Jain is fond of pointing out: "It's the debt, stupid!"
Fed's G.19 Consumer Credit (which is really debt) report
shows that in the month of February, people cut back on
revolving debt (think: credit cards) at an annual rate of 9.7 %
while nonrevolving debt (think: house payments) increased a tiny
0l.2% annualized rate. Overall, debt was dropping at a 3.5%
Now let's think this through for a moment: What does it mean.
Well, first and foremost this is a 'consumer economy' - and the
aggregate spending of consumers is something that essentially
determines the overall growth rate of the economy. Want to
see a 20% nominal gain in the gross domestic spending? How
about enticing consumers to spend 13% more annualized and do
this against a background of 7% inflation; that'd work.
In considering the economy (or company sales reports in
financial statements) I always look at "growth" of companies in
a really jaundiced way. I always look at purported
growth in the way companies report sales and then
discount them for inflation to get something near real
For, what is this? The 800th time, or so, I will direct
you to the
Minneapolis Fed web site so you can look at the underlying
inflation problem for yourself.
Suppose you're eyeing a company that offers sales figures going
back to 2005 and you notice (helped along by your calculator)
that company sales have increased 10% over the last four years.
"Aha! Good company, still growing despite all the crap in
the economy!" And you go throw some money on the table
hoping they will continue growing.
That's a horrible formula for one simple reason: monetary
inflation from 2005 to 2009 was 11.83% (so sayeth the Fed
so it must be true, right? LOL). So that company which
might have appeared promising at first blush has actually shrunk
a little bit on a constant dollar basis. So too, if the
company was in some kind of consumer-dependent sector,
I'd sure be wary of it simply for the reason that we may have
passed a nearly invisible 'tipping point' beyond which the
normalizing influences of things like reduced borrowing costs
may not stimulate as expected.
Think of it this way: It's like a big teeter-totter.
Consumer sluggishness weights down one side, but the other is
increasingly weighted down by lower and lower borrowing costs.
Under normal circumstances, the reduced costs of borrowing would
stimulate the economic teeter-totter back to balance.
Unfortunately, though we have several problems which the
administration and most mainstream economists aren't working
into their models. First, the consumer side of the
teeter-totter is weight down with a huge weight caused by
consumer demand saturation. How many pairs of sun
glasses do you need? How many flat panel teevees?
amazing when I start adding up the number of computer and TV
screens I've got here at the ranch. Ready for this?
In my office there are nine, and in the house there are
five. You're wondering "What in the world are
two people needing 14 screens for?" Well, they're not on
all the time, but they all contribute toward efficiency.
Normally when I'm working early in the morning, I only look at
four, but I'm eyeing a bathroom remodel project and wondering if
the few minutes spent...er...sitting down...could be turned into
more input time, in addition to output time, so to speak.
Pondering whether the change of that input time from magazines
to screen(s?) would make sense. Maybe not...
(Yes, I look at humans as having three primary modes: input,
output, and positioning/travel mode. Anything else, save
some dedicated meditation/contemplation time is nonproductive.)
So let's get back to the charade, shall we? The
SEC considers the uptick rule today, which while it might
prevent sell-off from occurring as quickly, shouldn't do much
about general market direction. The uptick rule might help
get the second leg of the major Wave 2 rally stoked up till
about mid July, which is my present expectation, but the Fed
numbers, if repeated next month, would really bother me.
I just wish the SEC would skip things like the 'uptick rule' so
that investors could see unit sales volume on something near a
real-time basis. Like the old saying goes, "We don't have
any problems more unit sales wouldn't fix..."
Up to a point. That point being where consumer saturation
and falling price points take over.
I was having a very interesting conversation on Tuesday with a
TV producer (who's working on a new show which might air on the
History Channel) and I explained, as best I could:
not a 'doomsayer' or 'doomster'. But I'm bright enough
to figure out that globalism brings with it a new kind of
past, if you had a failure of the food system, the effects
could be isolated. Or, if you had something like the
Black Plague break out in Europe, yes a lot of people died,
but the effects were again, geographically limited.
with 'money'. Back when gold was 'money' counterparty
risk was that the person holding the gold wouldn't turn it
over without a fight. The power going out was a
deliberate act, or done by the wind. But one has to
wonder if an attack on either the power-grid
EMP burst wouldn't possibly have devastating impact?
A local spat in the Middle East could blow up into an
oil-shortage-driven dieoff at a global level; think scorched
Consider that today, the failure of the food system would
have global impacts. It would shake the financial
system to its core. And terrorists could simply
self-infect suicide-sicko's and throw them on airplanes and
infect whole continents within hours.
never lived on a planet like that before. Used to be a
move of a few miles - or several hundred miles, would solve
many things. But today, unless you've gone through the
self-reliance exercise, and have invested heavily in your
own self-reliance training, you're betting that a complex
system of global proportions will remain stable enough in
all regards that you can trust your fate to it.
frankly, I don't. Which is not to say that I want
it to fail. Hell no. But could it
fail? Hell yes."
you've seen the "New
data show rapid Arctic ice decline" and that on the bottom
of the world, the
Ice Shelf is in self-destruct mode?
when most Americans didn't give a second thought to the nuclear
war possibilities and the policy/threat response which was
Mutually assured destruction (MAD) under
McNamara (who went into banking (World Bank) from there,
LOL). The other was "Duck
& cover". Which, most over 50 know is where the old
joke, "Bend over and kiss your you-know-what good-bye" came
changed, and the threats are probably about as real, but eyeing
them head-on is no longer socially acceptable. Oh sure,
the odd article, like
this one in the Fort Worth Star-Telegram do begin to break
the mold on 'preppers as nutjobs', but it's only a start.
One more thought, as long as I'm in cheer-you-up-mode:
Don't know if you have penciled out what happens if the global
warming problem really does turn out to be a combination of
skewed data plus pollution masking the real impacts of solar
output. But, I'd be keeping a very close eye on the
possibility of a deep solar minimum which is underway
right now. Have you even started to consider the
energy implications of a reduction in the sun's output
and what global cooling would mean in terms of energy
demand? Reduced agricultural outputs, reduced rainfall
(since solar heating drives evaporation)?
most important - stories of the day are likely consumer
saturation/ debt declines and the fact that as ABC headlines it:
activity hits a new low." Stories like these are the
drivers of longer-term outcomes, not something transitory like
the 'uptick rule'.
comment for the day is what? Keep an eye on 'the debt
problem'. And watch the Wholesale Inventories number when
it comes out this morning in an hour, or so. If we see
inventories building, that'd be a very bad sign because it could
fuel additional layoffs, and that would be another step toward
what I can the reciprocal of the "virtuous
that the "vicious cycle". But for planning purposes, it's
easier to label it
(the end of the world as we know it), because a complex global
system collapse -- despite the financial lovefest at the
G20 last week -- is still on the table.
How's your garden doing? You don't need TEOTWAWKI to
benefit from it. Just a hike in food prices. Or one
of them damn pink slips.
All this discussion of the paper chase is not exactly moot.
The stock market is looking to open almost 200-Dow points lower
this morning. What's the worry? Well, I may not be
the only one who is starting to add up the combined impacts of
slowing globe and scared consumers. A
Yahoo/AP report mentions earnings as a concern. Well,
quick, look surprised. What we we just talking about?
commodity guy, JB Slear over at
www.fortwealth.com just called. He says every day now,
for the past five trading days someone has taken delivery
of 2-million ounces of silver a day. Watching this one,
and watching silver prices.
Someone heading for the
Bunker so to speak? Copy
The fact that the "Sri
Lanka military sounds last warning to Tigers" gets me to
wondering how many of these last surrender offers have
been made over history.
they be pirating more Americans...21 this time. The
hijacking rate seems to be slowing, but that may only be a
temporary condition since seems like the various countries of
the world, including China and Japan have thrown some resource
into the area.
While that 30-days for a better plan clock is ticking, I can't
help but notice that Chrysler has unveiled a
new Jeep Grand Cherokee remake. If I read
Edmunds.com right, the high end Jeep Cherokee Overland
weighs in at $44,845 MSRP, weighs
4,891 pounds and has a combined city/highway 15 MPG.
Yeah, I'd say it could be redesigned a bit. Call me when
it's half the price, three times the mileage?
Fidel Castro wants to warm up relations with the US?
Help president Obama? Well, Cuba does have a working
national health care system which wasn't installed by the
pharmaceutical lobby.... that might be a help...
JPost reports today that "Israel
successfully tests Arrow 2 defense system." Couple of
days earlier and a few thousand miles away and they could have
gotten a 'two-fer" when that NK missile went up...oh well.
--- snip and save section ---
Retribing Around Interests
Had an interesting evening last night, attending the
local ham radio club meeting...good
time, but I had to leave (unfortunately) before the main
presentation of the evening which was about using solar power
for ham radio. Having solar panels, I have kinda got that
one down; maybe a huge overkill, but whatever.
Oh, sure, our local club is not as busy as some of the big ones
around the country; probably the two I'd point to as wonderful
examples are the Boeing
Employees Amateur Radio Society (BEARS) and the
MIT Radio Society which turns
100 at the end of this month. The
club has some dandy historical pictures of old-time radio,
here, if you're interested.
But my point this morning is not about ham radio (now More
Code-free, by the way). Nope. It's about 'clubbing'
and what I call 'retribing' of folks.
Although Palestine is a fairly small community (by East Coast
standards, anyway), there's a surprising number of affinity
groups/clubs/ self organizing collective activities. Maybe
it just seems richer out here in East Texas because there's a
lot less social noise. Or, maybe it's because the idea of
community involvement/community service is held in much higher
regard out here than I ever noticed in the "Big cities" I've
The local Boy Scout troops are well-respected, and with good
reason: The provide community service labor to clean up
the signs welcoming folks to Palestine (monument type signs with
a little landscaping around them). Then there's the 4H and
FFA activities. Girl Scouts active too.
For things a little further along the timeline, I was surprised
as all heck to find out that there's a fairly active writer's
club. And Elaine still has a carving project to get
started on, since she attended the woodworking club meeting
recently. Oh, and the we entered our red car in the recent
car show put on by the
Cars of Palestine auto club.
And we have some great gardening clubs in the area, as I guess
you'd expect in an agricultural area which has plenty of water,
most years and a favorable climate, even if the soil is mostly
worth of pines and onions (with lots of nematodes, but it is
what it is).
Did I mention that there are all kinds of hunting clubs?
Yes, plenty of those, too.
Maybe it's because I have been spending waaay too much
time in the 16-hour Type A track, but until recently I had
remained fairly ignorant of all the clubs/affinity groups
that were floating about society. Not that I have time to
be very involved, and not that I'm much of a joiner, but I guess
until recently, I hadn't been paying much attention.
"OK, why mention this?" Fair question. I'm starting
to feel urged, if you will, to get a little more involved
in a few clubs locally. Just thinking, at this point.
But with the possibility of further social stress ahead,
especially if the economy keeps unwinding -- and
super-especially if we get past some undocumented tipping point
and things really head south -- then being able to plug in to
some of the local interest "tribes" seems like a very wise
thing to start investing in.
So, I'm actually put the next ham radio meeting in Outlook,
which if the truth be known runs my life more than I do,
sometimes. Just something to think about...getting
involved at the 'goes to meetings once in a while' so that
should the community need to pull in this direction, or that,
for whatever reason, you'll at least have an idea where the
I think it was the plans made last night for a hamburger BBQ
before the next ham meeting that finally got me to put it on the
schedule and mention it, LOL.
Oh, and if you schedule everything and I mean
everything in Outlook: A new
for 'six times longer' sex" may screw up your schedule, so
to speak...but my schedule is usally (you know what'ed) by the
end of the day anyway....and this priority is usually...URGEnt,
Tuesday April 7, 2009
Buckle up and try to stay awake though this, as I've got my
lecture robe on and have been sniffing the china board marker
for a few minutes: Want to know when it will be easy to
call the ultimate bottom here in the Second Depression?
Wait for factory run rates to stabilize. "And what brings
this up," you're wondering? Well, buried in all the
headlines and economic noise on Monday was this little
report from the Midwest Fed that 'factory
activity slips in February'. And, looking elsewhere,
the astute investor could notice that a
"Poll - India's Feb industrial output seen down 1 pct/y/y".
have to consider the headlines out of the UK where
happy-talk/rally-the-sheep blather about manufacturing has been
finessed in ways that add immeasurably to what out predictive
linguistics pals call this period of developing 'surreality'.
Here's a perfect example.
Confused? "Beats Forecast" may be viewed in a "only fell
off a 24 story building instead of a 30 story building" kind of
way. "Less than expected" may refer to it only being a
16-20 story building, while "Most since 1968" sounds like it
refers to the mess on the concrete, compared with other
manufacturing death leaps in the past.
Sorry if this is a bit graphic, but it's important to have your
head firmly wrapped about the way numbers of column inches of
'news' reports can be distilled down to a single number while
the rest of the words in the story - a few hundred in many cases
- boils down to contexting this way or that.
Once you're nodding "Yeah...OK...so what?" the next item up is
understanding that economics of the conventional sort
hates...and I mean loathes in a fearsome way, the very
idea of cycles. Oh sure, those cycle guys (Schumpeter,
et all) make interesting reading, but the study of economics as
the complex interaction between cycles is generally frowned on
by economists of the mainstream stripe. (*If you've really
been hitting the coffee this morning you'll notice that of these
cycle guys, why are there so many with last names starting with
'K'? I should change my last name, perhaps...)
All of which would be fine if the conventional-thinking sorts
had a demonstrated record of accurate predictions, but
they don't as evidenced by the crap-pile economy we're in right
now, the main feature of which is what? Pretty much
falling everything. And that's why we need to consider something
that I've yet to see discussed in economics in anything other
than nearly incomprehensible multiagent variant studies that'd
make your head hurt. I call it simply "The Slosh."
No, it's not exactly an original concept, since it's
covered pretty well in the study of complex systems - which gee,
gosh, economics really might be -- but it doesn't make
headlines because no one has come up with the really simple
way to convey the information, other than infer how the
slosh is going by looking at a broad economic indicator,
such as the Consumer Debt figure due out from the Fed today,
which has me sitting on the edge of my chair with anticipation.
Either that or because I need to run down the hall, but let's
assume it's anticipation...
My consigliore', the JD in Tax Law and CPA fellow who I often
credit with being not only a good friend, but a fine economics
thinker, actual got me to thinking about how 'slosh' worked when
we were exchanging views on the old Long Wave Economics
newsgroup run by the University of Colorado back in the day.
He had made some very interesting comments about how in his
modeling of the economy (easily done with linked spreadsheets if
you have enough time on your hands) suggested that, just for
example, oil price movements could take as long as 60-months
to be fully integrated into the price behavior of all markets.
If you're a conventional economist, stuck in formula-land, a
good starting point for visualization would be a multivariate
implementation of the
Ea=Effort in person months
td=The nominal delivery time for the schedule
ta=Actual delivery time desired
Or, maybe the
F.N. Parr alternative. What I envision is something
like this, and I'll annotate this as a oil price change
implementation, supposing that you have an oil price change -
like the OPEC shockers of the 1970's coming through the
So was the 1980-81 'soft patch' just a result of a new stability
point in run rates and consumption following the 1970's oil
And so it goes for how economic shocks work out. As to
where we are today? If I were guessing where we are
presently in how the curve is developing, we might be looking at
something like this:
Pardon the lines not being precisely smooth - it's early
yet and I don't have a lot of time to spend on getting the
drawings 'just sop' but you can see the problem: There's a
fair chance that we will have some kind of a gulf problem
develop between this fall - when around the end of October it
will start to dawn on markets, I figure, that "OMG we are still
in a recession and is this a DEPRESSION will kick in...and the
Obama folks will be right saying "Remain Calm: Economic
recovery is almost here..." but by then the villagers with the
pitchforks and torches will be at the gates of government at all
levels asking "WTF?"
But, thanks to the miracle of offset curves, we can sketch out
the road ahead in very general terms, and hopefully have a much
smoother sail through the Straits of Disaster.
That funny shaded box are, by the way, means that we could argue
endlessly about precisely where things are, but the main
thing is to get the overarching view right and let the rest fall
OK, now that you're back to sleep, we move on to the next
pointer. Starting with Robin Landry's latest note to his
"Once in awhile I like to focus
on the larger trend to clarify my views as to where we are
in the market, and what I believe is ahead. Below is a
weekly chart of the Dow with the count I have as my primary
count, based upon other technical indicators I use to help
me stay objective in my analysis. As the chart shows, the
low on March 6th was the end of wave 3 and we are currently
in a 4th wave rally which should last several months before
turning down in a 5th wave to new lows. That low would be
the end of the larger wave 1 or A, and a rally lasting
almost a year would begin to form a larger wave B before
turning back down for wave C to even lower lows and the end
of the bear market.
My secondary count says that the
recent low was the end of wave 1, and we are in a wave 2
rally. The short term difference is of little consequence to
most investors, but the pattern will be more complex if my
primary count is correct. Under my primary count
the market should
rally to about 9700 sometime later this summer to early
fall, then the decline in the 5th wave would begin. I
will discuss targets for the 5th wave low once the 4th wave
top is in. If the count is my secondary count, the rally
will like reach a higher level around 11250 and the wave
pattern a more simple ABC or Up-Down-Up. Either way we are
in a period where the surprises are likely to be to the
upside until the rally is over. There is one other count
which is much more bearish and I will discuss it should the
market action dictate a change in my analysis regarding the
2 counts discussed in this update.
The main point I want to drive
home is that this is just a BEAR Market Rally. The LOW is
not in and we still have
several years of
overall market declines to come if my analysis is
correct and I believe it is. I would like to be wrong, the
economic stimulus works, the economy turns up, and
everything is great again, but history and common sense says
it won't. To put it in a more simple analogy, I liken the
stimulus program to telling someone who is deep in debt that
the answer is to borrow more money and spend his or her way
out of debt when common sense says it will only delay the
inevitable bankruptcy. Such is the madness in Washington. As
always questions and comments are welcome. I will answer
them as time permits."
is the place where I have to point out the usefulness of having
the 'skewed curves' thing in mind, because you can see not only
how I'm viewing things, but how Landry's work - which comes from
about 30-years of pushing data around following grad school has
reached a similar outlook.
And as if
Landry's work and my view isn't enough, I can help but note
another guy who has much the same outlook as mine & Robin's
is Dr. Marc Faber who says "Stocks
may see 'correction' of 10%" before we continue the rally.
So from 8,000 and change, a knockdown of 10% would be 7,200,
which as I've told you before is what? Landry's 7,200 (or
7,100 next level down) of support.
really, really awake, you should here something that sounds
almost, well, George-like about this part of the Faber story:
need some kind of correction, maybe around 5 to 10 percent,
and after that we can
maybe rally more
into July,” said Faber, the publisher of the Gloom,
Boom & Doom report. “The economic news, while it won’t be
good, the rate of getting worse will slow down.”
to spend so much time on the mechanics of how all this works
out, but then again, people come here looking for serious
economics and light-hearted humor. This is not
financial advice...just how I think things will play out:
Gold lower before higher, stocks lower before higher, and if you
think the sociopolitical air is charged and tense now?
Wait until this fall. Keep October 26th circled...not that
it will be the day, but around there and the weeks
following, say the linguistic reports, government's gonna be
hunkered down trying to cope with a whole mess of humans who
haven't had the roadmap handy who are going to be frothing mad
about prices going up and wages going down.
thing that keeps us from auguring into new Third World status is
manufacturing of something at a sustainable run rate.
And, since our manufacturing of bogus financial products has
been outed, we've now got to come up with something else.
Unless, of course, we can figure out a new 'over-unity' kind of
government, where government gives back more than it takes in
the way of taxes.
if I don't expect that breakthrough in human events will
be coming any time soon. So, I will just work on my
garden, tend my investments, and ponder how the system can keep
the obvious hidden in plain sight for so long.
Hand me a
fresh china board marker, wouldja? This one doesn't seem
to have...oh...you know....
the death toll is ultimately headed for the 200-range in
Italy from that quake this week.
USGS reporting a 6.9 in the Kuril Islands ( that's north
of Japan, like you're heading up to Siberia) overnight.
Appears to be in the cards as
GM Said to speed bankruptcy plans and board crafts savings goals.
A two passenger, two wheeled car from a GM- Segway alliance?
Hmmmm...would I still need to have a motorcycle license for it,
being a two wheeler and all?
I notice where the
Associated Press has started to move toward tighter management
of its content.
One of the things a lot of web surfers don't realize is the huge
amount of cross posting that takes place on the web with many
websites guilty of what can only be described as wholesale
content thievery. Many sights take whole articles
and simply repost them without adding any value (such as the
contexting which I try to provide here) and claim to be an
internet news outfit, which most are not.
Maybe it's been my news training, but there are two cornerstones
of the UrbanSurvival and
www.independencejournal.com sites: A business model
that doesn't depend on banners and content that is original with
links and only headlines (usually RSS type) back to original
Sites that simply repost and profit? Think sun setting....
search last week of a Phoenix blogger's home is making headlines
this week. The open question is this: Is it
threatening or intimidating because of the reports done over at
Wall Street Journal online has an article you might want to look
at if you're a highly compensated executive with a non-profit
operation. Upshot of it is that non-profit execs
might get the same kind of scrutiny as bankers...and one of the
ripest of areas could be the healthcare sector where high
dollar comp in 'non-profit' hospitals is...let's just say...not
much of the US is under freeze warnings - a bit late in the
season if the old farmer in me has it right, we note that the UK
Guardian is reporting on the Wilkins Ice Shelf is on the verge
of collapse. Since the predictive linguistics work over at
says the actual beginning of the global coast event will
follow the March reports start of its pendency by 60-90 days, we
can circle the May-June period for when this puppy could let go.
That in turn could let ice on land be freed up to slide in, and
ta-dah, Florida gets closer to becoming a reef. Wonder
what the LEAP put equivalent investment vehicle would be?
You might want to read the NY Daily News report headlined "Iranian
nuke plot vaporized in the city: NY banks unwittingly aided in
material transfers, says DA."
When details of this come out (apparently later today) it may go
some distance in proving that Iran really does have a
weapons development program. Which, it goes without
saying, is obvious since when you're sitting on a hundred years
worth of oil, the "We need electricity story" just doesn't wash.
But, on the other hand, if Pakistan can be trusted with nukes,
why can't Iran? After all, the US and Russian examples
show that nuclear weapons, although not used yet, have acted as
a kind of steroid -- or testosterone to be more specific -- with
regard to international conduct.
--- snip and save section ---
Safety or Uberment Controls?
Ah...a reader sends this on controversial HR 875:
"Recent response from one of our
CONgressional Critters regarding HR 875 letter of concern.:
So your take on this?
Suppose we can rely on this in
an Administrative Law hearing just before they seize our
small, family operated, organic farm? … “But your honor,
Congress never meant for this to apply to us.” Congressional
intent vs Legislative Judicial Activism. What small to
medium farm operation has it in their bottom line to argue
they are under the jurisdiction of the USDA not the FDA.
Best, (reader, name
Thank you for contacting me
about H.R. 875, the Food Safety Modernization Act. I have
heard concerns from many of my constituents about this
legislation but much of it is based on inaccurate
information. The Food Safety Modernization Act relates to
food safety issues and does not impact the organic and local
food programs and practices which are so important to
The recent spate of food-borne
illness scares, from peanut butter to tomatoes, jalapenos,
and spinach have highlighted the total inadequacy of our
federal food safety system. The Food Safety Modernization
Act, H.R. 875 is decades-overdue legislation that will fix
many of the glaring flaws in that system. Right now, the
Food & Drug Administration (FDA) - the federal agency
charged with food safety - can't issue food recalls, and has
limited powers to trace, inspect, and punish the
distribution of tainted food products. There's near
universal agreement that this needs to change, and the Food
Modernization Act would do just that.
Unfortunately, there are a lot
of rumors floating around about H.R. 875, and all of them
are either untrue or totally misleading. H.R. 875 has been
endorsed by all the major food safety and consumer
protection groups, including the Center for Foodborne
Illness Research & Prevention, the Consumer Federation of
America, and the Pew Charitable Trusts, to name but a few.
This is a bill being pushed for by responsible members of
Congress and backed by bipartisan, nonprofit watchdog
Some are concerned that H.R. 875
would "destroy" the organic food industry and harm small
farmers. I do not believe that this is the case. Organic
food is regulated by the USDA - H.R. 875 deals with the FDA,
not the USDA, and doesn't even touch farming practices. In
fact, H.R. 875 would require stronger inspections of
imported food to make sure that it meets organic standards,
strengthened the market competiveness of homegrown organic
foods and the farmers' markets that sell them. H.R. 875
wouldn't regulate or "shut down" farmers' markets, or
I have long been a supporter of
local and organic agriculture, fighting for reforms to
protect small family farms and promote organic farming
practices in the 2008 Farm Bill. I pushed for federal
support for farmers markets, and am proud that Congress was
able to obtain over $20 million in grants, support and
funding for local farmers markets. If I thought that the
Food Safety Modernization Act would have a negative impact
on the family farms, organic farming practices and local
foods that Oregonians prize so highly, I would not support
The Food Safety Modernization
Act is strong, responsible legislation that makes our food
and our families healthier and safer. I would not support it
if I thought it would adversely impact local agriculture. I
believe that small family farms, farmers markets, and fresh
locally grown food are an important part of the answer for
problems ranging from childhood obesity to food security to
economic distress, and I will continue to strongly advocate
Thanks again for your thoughts
and suggestions. I hope that this information addresses your
concerns about this legislation.
Member of Congress"
I'll tell you what: I will throw 875 into my Vortex Reader
again and reread it today, but seems to me the first time I did
it, I got the impression that while the stated objectives
sounded good, it was kinda like the (misnamed) Patriot Act(s)
which although they seem reasonable at first blush, could
be used by an authoritarian despot as a means to crack down on
people. So tell you what: I will comment more this
week after I do a reread of it...
sent me a note which happens from time to time:
reading this mornings' report on the www2 page ...main page
comes up blank.
done all morning. I'm in Northern Calif.
If you can't get your daily dose of UrbanSurvival on the main
www.urbansurvival.com/week.htm, there is always the
www2.urbansurvival.com/week.htm page, or the blog style
formatted version at
there are some supposed 'productivity enhancing' internet
censorship tools commonly used by corporations which would
rather you be working for their interests rather than thinking
so damn much. For these, I have set up the
www.independencejournal.com site, which is usually updated
about 5-minutes after the UrbanSurvival posting goes up.
readers have mentioned that there are some days when my writing
is pretty good, while other days the content is OK< but they've
found need of decoder rings and animal entrails to figure out
what I was getting to, since there were so many spelling errors.
that's a problem...and once again, if I had my fancy polling
software installed ('soon come, mon') I'd be asking
something like "Which is more important to you? Proper
Englitch and use of smellchecking? Or, would you prefur
of the above...
press release from NOAA the other day telling me that "National
Tornado Experiment to Begin in May." The advisory
project, Verification of Rotation in Tornadoes EXperiment 2
(VORTEX2 or V2), is the largest and most ambitious attempt
to study tornadoes in history and will involve more than 50
scientists and 40 research vehicles, including 10 mobile
is kinda cool, I thought, as I continued reading:
of focus include southern South Dakota, western Iowa,
eastern Colorado, Nebraska, Kansas, the Texas panhandle and
western Oklahoma. The V2 Operations Center will be at the
National Weather Center in Norman, Okla."
why they didn't including Washington DC as one of their sites?
Lots of hot air around there, I'd think would create all kinds
of interesting meteorological effects...fact they should be
huge, since the financial effects of all that hot air is
was the reader who sent me a note all excided by reports that
the reason for the Large Hadron Collider being shut down was
because a 'black hole' had been created and was being carefully
didn't have the heart to remind the fellow to look at the
dateline on the story. April 1.
Monday April 6, 2009
The Good Times Roll
The big economic number to those of us who watch
inflation/deflation battling will be tomorrow's Consumer Debt
number. Mislabeled "Consumer Credit" by the Fed, which
insists it's called that because banks issue credit to
consumers, in the Land of George, it's all about humans, not
bankers, and let's call it what it is....debt.
Whichever side of the name-game you're good with, the news
tomorrow afternoon should indicate if the economic 'stimulus'
promotion has been large enough to pronk consumers into resuming
their free-spending, debt-ridden ways, since America has
transitioned from being an economy based on producing things to
an economy based on financial products musical chairs.
To be sure, the
Financial Standards Accounting action of last week contributed
to the recovery in financial stocks, but for how long is
anyone's guess. The futures are looking a bit downish
prior to the open of trading this week, which I'd expect this
week to put in a pre-Easter low or pullback of some size.
Couple of hundred points down, anyone?.
As I've been expecting,
gold seems to be pulling back, as safe haven buying is drying up.
Because there's so much inflation in the pipeline, I figure gold
is a slam-dunk over the longer since Treasuries are yielding
bupkis. All depends on the timing and gullibility of
foreign investors, I reckon.
Oh sure, a huge fraction of American's are unemployed, or
seriously under employed - something close to 17%. But
look at the flip side of things. You know all those IT and
Customer Service/CSR (IT-enabled Services - ITES) jobs that have
been outsourced to India?
study by the Associated Chambers of commerce and Industry of
India (Assocham), said 54 percent of the workforce in
the IT and ITES sectors were afflicted with depression,
severe headaches, obesity, chronic backache, spondylosis,
diabetes and hypertension. "
Payback in the great karmic scheme of things?
Fritz Henderson at GM is not ruling out the possibility of
bankruptcy. So the auto troubles continue - bad news
for IAW workers, but if you run an auto repair shop, it might
mean more business. As cars stay on the road longer, and
I've been watching auto repair
stocks like AutoZone which has gone from around $89 in late
November to over $160 a chare recently. A fine example
of how one should be reading the news and figuring out the
consequences of the headlines. Do that well and you're
bound to see better results in your personal portfolio, if you
have one left.
Despite some banks trying to give back their TARP money, the
government's not interested. Seems instead that the
Treasury is planning to expand its role of financial uber
secretary Tim Geithner considers ousting bank execs.
If the feds can call the shots in Detroit, where will it end?
Perhaps if Geithner can keep the bank execs cowering, none will
come out and spook the markets by revealing the true nature of
'snake-eats-its-own-tail' economics now in play. As long
as that can happen, aided and abetted by the FASB's complicity
in accounting rules, the good times seem destined to roll.
For a little while, anyway.
Don't pay no mind to stories like "Mortgage
Fraud Epidemic: How the FBI Blew It and Why There's No 'Perp
Walks'", unless you want to deal with reality. Your
call. Good times are a lot more fun than
reality...especially if you're locked into the paper-is-money
paradigm. And I might be getting into that paper chase
myself on a good pullback this week....maybe....
Really A Crisis?
Despite some reports that
North Korea's rocket launch was not a total failure - the
Western press apparently not able to admit it actually worked
- I keep asking myself this nagging question "Is this really a
Yes, the government of North Korea is about as friendly as a
rattle snake and as predictable as a
as a cornered politician, but seems to me that the horse is out
of the barn now, and unless someone is willing to step up and
impose a food embargo, or hornswaggle China on this, there's a
whole lock of fiction and not very much traction.
Ah...here's the word traction again this morning in a
"Satellite proposals gain traction after North Korea's launch"
says the WSJ Online edition. And, of course, the
republicorps are urging punitive actions,
take John McCain for example, please.
It's like the distinction between data and information:
Data that can't be distilled down into action is
pointless and I'm not seeing anything much in the way of action
steps/go forwards out of present coverage. Maybe I missed
it, but this seems like the news department version of one of
those 3-hours meetings in the conference room back when where I
emerged often going "Whew! Was that ever a waste of
Still, there is some information to be had looking at
polls: When the cross-tabbing and interviewing's done,
the partisan gap between the republicorps and the
democorps is at its widest in a long spell.
Now that is useful information. When the real 'balance of
power' in the world is between the 'have's and the have-nots,
notice how the partisan lines/ vertical axis get
ramped up in order to suck people back into the right/left
paradigm, rather than the horizontal axis which defines vertical
position: the PTB vs. the people... something to ponder,
A 6.3 earthquake has struck
central Italy about 70-miles north of Rome, Italy this morning.
At least 50-dead according to some reports. Homeless
exceed 50,000 in this report. And
the scientist who tried to warn folks? He got into hot
IBM is reportedly taking its offer to buy Sun off the table.
30 killed (or more) in Iraq.
Montana Gun Plan
Montana is on the way to the Supreme Court over the persistent
attempts in the District of Corruption to wipe the Second
Amendment off the books. It'll take a while to get
there, but that's how things look...
--- snip and save section ---
Monday Management School
There's a very interesting question of policy behind
the story in Variety this weekend about how "Fox fired up over
'Wolverine' review. Seems the fate of
blogger/columnist Roger Friedman may be up in the air as a
Best I can figure, the problem is that a copy of "X-Men Origins:
Wolverine" was leaked onto the web last week and Friedman
reviewed it. And 20th Century Fox (all this is internal to
News Corp) is worried that the leak and review could cost
millions in potential box office receipts when the movie comes
out in a month or so.
Here's the interesting policy question which we will pose this
morning for "George School for Wannbe Executives": Would
you fire the guy who wrote the story about the leak and who did
the review, or would you just pursue the source of the leak?
One of these days, I will get my fancy online polling software
installed so we can ask questions like this because it could be
argued either way. Money versus "what's news?"
My call? The blogger was just doing his job, as I see it.
A major motion picture was leaked onto the web and that's
news. Someone in 20th Century oughta be answering for
how the leak happened.
Back at the Abyss
A reader underscores how continuing layoffs are really starting
to bite, despite the momentary hit of nitrous that's puffed up
the financial markets:
I have to think that it is more
dire out here on the front lines than most people think.
I stumbled across
a Met Life survey than claims that 50% of Americans are only
one month - that's two paychecks - away from defaulting on
their financial obligations.
Wow! We are teetering on the
edge of the financial abyss! We are much closer than I had
imagined. We are basically at a point where most Americans
have no personal financial safety net at all! What the
numbers mean is that we are only a month away from a huge
national crisis should unemployment soar higher! In the
1930's people had some savings to help cushion the blow of
losing a job, but not so today. This seems to be a financial
fuel air bomb just waiting to blow!
If we see the markets or US
Treasury auctions breakdown, that will probably be a sign
that we are a month out, perhaps less, until the whole
system goes ka-boom and implodes.
What's left? Commercial real
estate is supposed to be the next bubble to pop. I know a
local commercial Realtor who has been one of the top earners
in the LA Area, who hasn't been able to sell anything in the
last three months.
And then there are US
Treasuries. This is where we all go when we are at a loss of
where to find a decent yield for our money. Treasuries are a
safe haven! But, because the FED set the official interest
rate at 0.00 to 0.25% they have locked themselves into a
scenario where we can only see Treasury yields go one
direction and that is up! When Treasury yields go up, bonds,
bills and note values drop.
At the G-20 this week, if any
Americans were paying attention, they basically told Obama
to take his Treasury paper and shove it! China announced
that they want the Yuan to replace the dollar as the reserve
currency in Asia and they threaten to dump their US Treasury
Bonds! Along with their currency swap deals with Argentina,
Indonesia, South Korea, Hong Kong & Malaysia this should
pressure the dollar to fall further. The dollar has lost its
support in Southeast Asia. The Treasury is losing more
If Obama and The Fed keep trying
to borrow to bring back prosperity, which has never worked
as a financial tool and don't raise interest rates to make
the US Treasury paper look more interesting, we will see the
rest of the world turn their back on the US Dollar And if
this holds true, the 2 billion in daily treasury sales we
need to pay for our debt will dry up and we will be at
Defcon 1. One month out and nowhere to go.
Working on my garden and trying
to persuade the family to sell the house.
I agree whole-heartedly with the assessment, but I'd note that
this 'one month from the abyss' has been largely hidden from the
general public by tweaking government numbers. Most especially,
I'd point to how the personal savings rate figures have
been changed to reflect declining home values.
When things were on the way up, personal savings included
a bit of the increasing valuation of a family's home. Now
that home values are dropping at 18% - 19% annualized (more or
less, depending on market) the savings rate. I'll show you
what I mean. Here's a chart from the Bureau of Economic
Analysis very much on point:
I don't know about your circle of friends, but in mine, no
one was able to save at a 3% rate in Q4. When we talk
about savings, though, we have to be quite specific: The
way the n umbers skew presently, it's no longer a measure of
net worth, it's more a cash flow problem.
Officially, we find the definition of the Personal Savings rate
on page 17 of the National Income and Product Accounts manual
used at the Bureau of Economic Analysis:
saving is equal to personal income less personal outlays and
personal taxes; it may generally be viewed as the
portion of personal income that is used either to provide
funds to capital markets or to invest in real assets such as
Under this cleverly worded approach, the actual performance of
your home as an investment, or that 401(k) spanking you're
trying to claw your way back from doesn't figure into the
Since my topic today is "Monday Management School" I'll leave
you to ponder how you'd make the call. The NIPA approach
is to call the savings rate money before it's allocated to
various investment vehicles, while my approach is that the
savings rate ought to be genuinely reflective of the change in
savings of all sorts. That would include home
equity change, 401(k) change, cash in the bank and so forth,
because to anyone with common sense, that's what saving
In the meantime, ABC report "As
home values fall, property tax revolt brews" in a tea party
Here's a worrisome headline for you: "Is
the end near for Free Thinking on the Internet?"
Probably not for a year or two, but in the past when a n
industry was getting a little too good at communicating,
regulation came along. Remember the
Communications Act of 1934 that popped up around the mid-point
of the last Depression?
No worries here, of course, since I try not to engage in that
free thinking stuff. Low priced? Well, sure....
Tons of comments coming in on Crop Circles and whether they
contain information of any importance when spun:
"I'm not sure if Simeon Hein
reads your blog or what. Needless to say, the idea of
"spinning crop circles" is breaking out all over ---- like
some of those measles cases in Europe.
So here's my deep
post-philosophical question for youse guys, the Texas Time
is this an idea whose time has
come? Or else, is it really a Time whose Idea has come???
Your answer may determine your
survival chances in the New World (Dys)order -- or not.
Your friendly Zeitgeister,"
And here's a really cool one from a computery kind of fellow:
"So in about 15 minutes wrote my
own software to spin things at any amount of rotation per
second. As it turns out ANY picture will produce a geometric
pattern even if none exists. This is a simple harmonic that
sets up between the update interval, your screen, your CPU
and the image content. It is far more pronounced with
anything that is already geometric i.e. crop circles because
they already contain a period. Its just like the car
commercials where the rims look to spin backwards or
forwards slowly. That is a result from the number is spokes,
the angular speed, and the frame rate of the camera. If the
frames are 1/30th sec apart and you have N spokes, and the
angle traveled in 1/30th sec is N/360, then the rims appear
still. If it is slightly slower, then they move backwards,
if they move forwards, then it is slightly more.
I also tried using hardware
rotation (3D card hardware vs CPU/software) and got the same
result at about the same speeds.
For your spinning circles
message to be meaningful, ALL crop circles need to produce
additional information at the SAME angular rate. I cannot
attribute any additional meaning to crop circles based on my
FWIW, I'm attaching my code. It
). Just open the .pro file and press play. In the top box
enter a URL or c:/some/file and use the slider to control
the rate of rotation."
Sop is there something embedded, or
is this just an artifact of home humans process video?
More to come...and yeah, as soon as the first round of chores
for the day is done, guess what I will be spinning up?
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.