- Friday about 8 AM Central Time ....some typos are fixed by
12, 2010 07:55 CST New?
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The Usual Saturday
This being the
weekend, fresh content is for subscribers to our premium
www.peoplenomics.com. Our focus this weekend is on
why the job recovery seems strangely absent and why
government, to a certain extent dictated by real economics (that
no one talks about) may be forced into a greater and greater
socialistic role. Just one problems: The expansion
of the Nanny State eventually becomes little more than an
updated version of the old economics problem of 'the shopkeeper
economy'. We call it "The synthetic Jobs Problem".
June 11, 2010
FAA Closure in GOM
the FAA is closing down the Gulf of Mexico to 'unauthorized'
aircraft...This coming as a Notice to Airmen (NOTAM) issued late
Wednesday night that just popped up in my flying emails this
No pilots may operate an aircraft in the areas covered by
this NOTAM (except as described).
Pursuant to 14 CFR section
91.137(a)(1) temporary flight restrictions are in effect for
deepwater horizon/mississippi canyon (mc252) incident
cleanup and reconstitution operations an area bounded by:
290500n/0904000w or the leeville /lev/ vortac 258 degree
radial at 30.1 NM to 300000n/0890000w or the gulfport /gpt/
vortac 169 degree radial at 24.7 NM to 300000n/0870000w or
the crestview /cew/ vortac 196 degree radial at 52.2 NM to
280000n/0870000w or the panama city /pfn/ vortac 208 degree
radial at 149.6 NM to 280000n/0904000w or the leeville /lev/
vortac 201 degree radial at 76.3 NM to the point of
beginning at and below 3000 feet AGL excluding the airspace
outside of 12 nautical miles from the us coastline. This
area is also depicted on U.S. Gulf coast VFR aeronautical
chart id helgc as an area bounded from south pelto 2/sp02
then to south pass 6/sp06 then to chandler 39/ch39 then to
pensacola 984/pe984 then to desoto canyon 635/dc635 to south
timbalair 242/st242 and then back to original point. All
aircraft operations are prohibited except those flights
authorized by ATC, routine flights supporting offshore oil
operations; federal, state, local and military flight
operations supporting oil spill recovery and reconstitution
efforts; and air medical and law enforcement operations.
All pilots operating within and
near this area including the shoreline should exercise
extreme caution due to the numerous low level operations
associated with the deepwater horizon/mc-252 incident 3000
feet and below.
Aircraft involved in these
operations may make sudden changes in direction, speed, and
altitude. For additional information, participating aircraft
altitude assignments and awareness, all pilots are
recommended to review the following web site dedicated to
the aviation cleanup efforts at:
The incident commander has
directed that aircraft participating in the deepwater
horizon/mc252 incident, operate at the altitudes assigned by
mission type unless otherwise directed.
Oil industry aircraft on routine
support missions within the TFR area should not operate
below 1500 feet weather permitting until within 2 nautical
miles of their landing platform/site and remain on. Their
assigned mode 3a code at all times. Flights within the
temporary flight restriction area should be conducted under
visual meteorological conditions (vmc). In the event
instrument meteorological conditions (imc) conditions are
encountered, pilot's should attempt to maintain VFR to the
maximum extent possible or contact ATC for further
instructions or exit the TFR via the safest route.
Participating aircraft in the
recovery efforts are required to contact houma air
operations at 985-493-7607 for assigned work area and mode
3a beacon code assignments. Aircraft shall squawk the
assigned mode 3a beacon code at all times while inside the
With the exception of aircraft
conducting aerial chemical dispersing operations;no fixed
wing aircraft are authorized below 1000 feet above the
surface unless for landing and takeoff
For additional information on
air operations within the deepwater horizon TFR see website:
Pilots are advised to check
notams frequently for possible changes prior to operating in
Exceptions: operations not
covered by the above authorizations may be permitted on a
case-by-case basis dependent upon safety issues, operational
requirements, weather conditions, and traffic volume.
Flights authorized under this exception must be conducted
under visual flight rules. Pilots requesting flights under
this exception must contact the houma deepwater horizon
incident air operations center at 985-493-7804 between the
hours of 0600-1800 cst, a minimum of 24 hours prior to
desired flight time. Operators should be prepared to provide
precise details of their requested flight including: pilots
name and contact information, company/organization, purpose
of flight, type aircraft, callsign, ingress/egress points
and times, requested altitude and route of flight. Pilots
will then be provided with additional instructions for
obtaining final approval and beacon code assignment.
Any aircraft observing oil while
operating in the gulf of mexico should report the location
to the oil reporting hotline at 866-557-1401 upon landing.
Report should include lat/longs of the oil and time
Pilots should be aware that
flights approved under this exception are subject to last
minute change or cancellation due to the dynamic nature of
this event. Houma air operations center at 985-493-7607 is
the coordination facility. For information about this NOTAM
contact the system operations support center (SOSC) at
Far be it
from me to second-guess the FAA but this may cut down on the
number of spill pictures and videos coming out from private
pilots in the area...
Map with closure area in red here. Eyes wide shut?
To Hunch, or Not to
recall our recent chat about whether to sell covered call
options on a certain inverse financial stock that seemed
like a good idea at the time. Well, if I had done as I
contemplated I would now be up some double-digit percentage
on that trade and I'd be counting my money.
forgotten, the idea was that I would sell several covered option
contracts when this (inverse) stock was up, then when the price
came down this week going into options expiration a week from
now, I would have covered and simply pocked something like $100
of option price differential for each underlying 100 shares of
stock, which would have effectively lowered my entry cost by a
buck, or I would have taken Elaine out to dinner.
say I would have played the Big Rally we've been in these past
few days and made money on it while continuing to hold a
downside position via the underlying inverse ETF shares.
have, should have, would have, but it gets us around to hunches
and how & when to play them. This morning, for example, my
hunch is that while the market may rally and get some
follow-through into next week, this might not be the time
to commit 'widow & orphan money' (or kid's college funds)
to very long-term positions, but then again, the usual
disclaimer applies that I don't do financial advice...I
just write about what I've done or am in the process of doing.
for my longer term pessimism if the latest note from Robin
Landry to his colleagues in the professional money manager
The sharp rally today (Thurs)
has reached the point for the market to turn down
immediately if the wave count I showed in my last update is
correct. That count showed we have had a series 0f 1-2’s and
we are now ready to turn down in a series of 3rd waves to
the 8100 area. I am attaching a chart with a alternate wave
count that shows the wave count with one less 1-2, and this
rally could still reach my 10450 area target before the
downturn. If the market rallies much beyond that area I will
do an update with other possible counts."
having a hard time with the eyes, that trend channel on the
right side corresponds to a target range of 10,200-10,350.
judging by the retail sales figures just out, the market's early
strength before the numbers may be in trouble. This graph
sums it up:
release than came along with it said:
U.S. Census Bureau announced today that advance estimates of
U.S. retail and food services sales for May, adjusted
for seasonal variation and holiday and trading-day
differences, but not for price changes, were $362.5 billion,
a decrease of 1.2 percent (±0.5%) from the previous month,
but 6.9 percent (±0.7%) above May 2009. Total sales for the
March through May 2010 period were up 8.1 percent (±0.3%)
from the same period a year ago. The March to April 2010
percent change was revised from +0.4 percent (±0.5%)* to
+0.6 percent (±0.4%).
trade sales were down 1.4 percent (±0.5%) from April 2010,
but 7.4 percent (±0.7%) above last year. Gasoline stations
sales were up 20.2 percent (±1.8%) from May 2009 and
nonstore retailers sales were up 15.6 percent (±1.8%) from
the last year's figures were awful. But if you want a
meaningful comparison roll back to the May 2008 figures before
the economic collapse foreshocks began. There,
we find that retail sales were $377,272,000,000 versus the
$362,517,000,000 just reported today.
means that unadjusted for price inflation, we are down 3.9% for
the two year period...and the happy talk about up from last year
(when the disposal was still on) are meaningless.
Hell, even 2007 had higher retail for May...retail was
$372,224,000,000 in '07!
in 5% a year for deflation and we're down probably somewhere in
the area of 15% on a real life experience basis.
hadn't noticed, huh?
Big China in Little
two problems with China that need resolution...maybe three.
China's internal inflation rate has risen to a 19-month high
and this is something their leadership is watching. One
reason the internal inflation is so key is that the
Yuan/Renminbi could rise which might quench some of the
external / overseas / USA demand for Chinese goods.
the monetary issues, however,
there's the matter of labor unrest & strikes which China may
be forced to deal with brutishly because any breakdown in
manufacturing would run contrary to China's apparent plan to
build its middle class so it's large enough for the internal
economy to become self-sufficient without a high reliance on
external trade via exports.
yourself as China. If your government lets the
Yuan/Renminbi rise too quickly, the external price of
Chinese-made goods could go up quickly and that might shut down
some external demand. Worse, since the US is your key
trading (consumer) partner for a lot of goods, raising the Yuan
too fast could set off inflation in the USA and that in
turn would prompt price inflation in the US on more costly
imports, which could force the Fed toward raising rates and what
that really means is printing more dollars.
which then leads to more dollars actually being printed which
reduces the value of the US denominated bonds which you bought
several years ago when the US wasn't printing so much.
the US M1 currently is up 6.78 percent over the past year, and
while the broader M3 was collapsing, perhaps because of the
slowing velocity in Depression 2.0 (but no one would ever admit
it, of course) you'd have to look at the situation not simply as
a "what's good for China internally right now" but a zoomed out
"What does this do to our past investments?"
a while longer, of course, but it keeps the financial press full
of speculation since financial writers need to fill their
columns up. The real decision-point for the Chinese may be
some hidden variable like the annualized
rate of increase in the US M3 accelerating beyond the
internal growth rate of the Chinese economy. When that
happens, then the marketplace will be making the decision
anyway, so making the Yuan rise 'official' becomes an
inconsequential move. In short, China may just be waiting.
very short term, as long as US M3 is flat or down, it's all just
a variant of the old game of 'call the bottom' except it will be
in FOREX, instead of down on the Wall Street.
other hand, what's ahead for the market next week - and beyond -
is a little more obvious in the headlines.
I love it
when scary headlines come along like "Chaos,
Anarchy to Reign if Paterson Shuts Down NY". Why would
I love such a headline? Because that's the kind of
headline that makes Wall Street nervous and so my hunch
is that next week, Paterson will start cauterizing state
spending and that might throw cold water on the
bull's rutting season evident the past few days.
times I've been to New York, the place seemed like chaos
anyway, so I'm not sure what would really have to change...
Hot now in
Kyrgyzstan where 23 have been killed and more than 300 wounded.
That Sinking Feeling
that sinkhole in Guatemala a while back?
Now they're popping up (or is that down?) in China.
Repeat after me... "This is not a beam
weapon, this is not X37b connected."
2,266 people as the Department of Justice goes after Mexican
Drug cartel operatives...
That (second) teenage woman sailing around the world has been
found safe after being dismasted.
some proud parents, don'tcha know...any 'kid' to take on the
Southern Ocean is not a 'kid' after that...
and save section =====
Greasy Mess/Dead Oceans
another headline about the Gulf...this time president Obama
meeting with the chairman of BP.
readers have asked why I'm not giving more ink to the rampant
speculation about imminent evacuations and rumors of forced
relocations and so forth that are going around the net.
simple answer: I try not to get sucked into fear & drama.
True, the Gulf is a big oily mess and it's going to be a bitch
to clean up, but consider it may be Christmas (and maybe not of
this year before the oil stops flowing. I could
speculate that oil flowing into the Atlantic would start to
change the balance point of the earth and that in turn could
lead to massive earthquakes in the Southern US and might even
set off the whole planet shifting its axis.
could speculate about 'foreign troops' and all kinds of other
the deal breaker: It's obvious to me that if
someone really thought there was a chance of mass evacuations
they would be buying up all the cheap/foreclosed property they
could in places like suburban Detroit.
that homes which were once in the $5-million class can be had
for as low as 1-10th that ($500k if you're asleep) lately
in placed like Bloomfield Hills in Oakland County.
Consequently, the question to ask if you live anywhere in the
South is: Should I start considering up country
property? Elaine & I have actually looked since any long
term government action would likely be in the area within 50-100
miles of the coast, so we might be able to sell this property
and move somep0lace further north (and maybe a bigger place)
since this place is well built-out and nearly self-sufficient in
it's something to think about. A summer place on
the upper Michigan Peninsula picked up on foreclosure could
be a winning lotto ticket...but I don't see many people in the
Southern states bidding yet. You might want to spend some
time house-surfing and farm-surfing if you really think
large-scale dislocations will result. I know some
accomplished folks who love the area...and who can blame 'em?
No fire ants...
readers want to know:
Just wonderin' something after
listening to Matt Simmons toss comments - oil volcano, 30
years of flow, poison
the Atlantic - about on a Dylan Ratigan program.
How does the Gulf fiasco reflect on the origin of oil
debate? 30 years of spewing is a lot of dead dinosaurs. Your
is that most people are not reacting rationally because their
thinking is bounded. They tend to be risk-averse.
If I lived
in Florida, I would be papering everything north of the
Mason-Dixon with resumes. But people at some primordial
level are not much different from the goats out back. They
don't take the big bold steps to get ahead of the curve.
As much as
we enjoy the East Texas Outback - and since it is far enough for
the coast to be safe for a while, Elaine and I have been tossing
darts are places like St. George Utah, Michigan and other places
as possible sites for our 'next adventure'.
bother-in-law (Panama Bates) made a very good point when we were
kicking this around a few weeks ago. "In South America,
officials say 'Don't build your home there because the land will
slide if it rains hard'. Then it rains, land slides kill
people, and yet as soon as the rain is over, people move right
back to the same places with the same risks."
really are nuts. Same thing is true with the oil
situation. A friend of mine (PhD. level kinda guy) called
me from Miami and asked "When do I need to move?"
know if you will ever need to go," I told
him, "But if you need to then it will be
too late and all the good options will be closed to you.
You have to stay ahead of life."
thinking that people are smarter than they are: When
Diaspora popped out of the HPH linguistics, a long time back I
would have thought "People will see the risks and begin to plan
and then act..." But, no, that doesn't happen very often,
I'm not a
footloose kinda guy - I like to go somewhere and stay.
But, events in life have caused me to live in Seattle, remote
parts of Alaska, San Francisco, San Diego, Boca Raton, and now
East Texas. Every time we move, it seems to be good
for us. Meeting new people, going new places, seeing
new sights...it's the kind of ongoing adventure life is
supposed to be. Riding a wave.
look historically at freedom it seems to have some
connection with mobility. People got mobile and
left Europe over the issue. Palestinians and Israelis are
at odds over being penned in...that kinda thing.
hardest parts of life are to see it for what it really is, and
then act in a Big Ki way to face it head on. If I had a
place on the Oil Coast, or within 25-50 miles of it, I'd have
sent out (by now) several hundred resumes to places up north.
An d I'd
keep sending them until I had a job or until the oil was capped.
thought is "Are you a leader or a victim?" Your behavior
will show the truth - regardless of your talk - to the
aware observer. Those who embrace change and are early
adopters intuitively seem to have better odds, but that's just
because I tend to think - and do - the audacious.
awed by size, density of undersea oil plume in Gulf" should
be driving you to
www.Monster.com if nothing else.
George, Was looking at
Spaceweather.com this morning (thurs) and noticed:
1. A solar wind stream flowing
from the indicated coronal hole is expected to hit Earth on
or about June 16th. Credit: SDO/AIA
2. Comet McNaught (C/2009 R1) is
gliding through the inner solar system, due to approach our
planet only 100 million miles away on June 15th and 16th.
June 16th is Wednesday, perhaps
your earthquake may occur as predicted?
Ask me on
the 17th. If my crystal ball has been shaken off the table
and been broken by a quake, the answer may be 'yes'.
Not My Zeus!
here: This "Zeus
Trojan infiltrates Bank Security Firm" has nothing to do
with Zeus the Cat using the computer here at the ranch.
useless animal...even has problems with rudimentary 8088
assembler code. Just worthless, I tell yah...eight-bit
floating point? Total beyond him...
Wryrony: Acts by Universe/the Universal that when you
catch them really show that Universe has a fine sense of irony
and is 'just playing with us'.
Example: As I whined about yesterday about my
seriously twisted left knee, as I was sitting at my overflowing
inbox, a small packed from a nice local person named Gayla Lacy
floated up to the top. It was a package our artist friend
Rebecca Price had
asked her to send me a week or so back with a sample of
"Ultimate Healing Creme".
So I went
to the web site to read up on this stuff and found:
balance RX Topical Nutritives Ultimate Healing Cream
provides proven topical nourishment allowing the body to
heal by giving damaged and
injured joints and
muscles exactly what's needed precisely where needed.
package had arrived the day before my misadventure
which goes to once again prove my contention that the Universe
is always in some way, or other, pulling our leg, if we just
know where to look.
combination of the healing creme, sleeping with an Egyptian
cubit on the knee, a 400 mg dose of ibuprofen, and an adult
beverage to help sleep show up seems to have worked its magic.
I can walk again, thanks to all these steps and a lot of good
will of readers...thank you.
say the leg 'feels good' yet - no expectations there. But
when Universe decides to pull my leg, it's always a good one.
Send your comments
Shop Till You Drop
Peoplenomics This Week
Life Through Meta Set
Many times, our Sunday report will feature a single article that we
pursue 'in depth' but occasionally, I feel compelled to line up a whole
series of seemingly unconnected data points to see where they will lead.
Remember those TV shows where the trick-shot pool player lines up the
balls just before making an 'impossible' shot? Well, think of it
that way, except the balls being used are yours & mine. Just as
the future of the trick-shot is determined by the placement of the
balls, so too our collective future is determined by what pops up in
meta data set we all create on the fly. Which would be our cue to see what has been popping
from the dream Collection over at our free to the public
National Dream Center
project...following that, some discussion of trends in FDIC data...
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Dream A Little Dream...
If you have an especially vivid dream that seems to have
something to do with the future, please write it down so
others can look it over for possible future/predictive
values. Simple go to
www.nationaldreamcenter.com and click over to the
The folks at Maxa Research have put together a short video
(sound track by guess who?) that
shows the Maxa Cookie Manager. You can see it here.
I don't usually get all whipped up about software, but this
is one of those dandy tools that just simply works great.
First thing I put on my new computer when I got it was Avira
Anti-virus and Maxa Cookie Manager (MCM). Either
follow the on-screen download instructions of simply click:
Once you try it out, to upgrade to
the fully functioning version, just click the upgrade button (!)
on the upper right hand side for the $35 unlock to get it to
remove even those nasty and highly intrusive 'non-browser
specific' cookies. Bonus: You computer may run
"Live on $10,000" A
Having a hard
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migrate up the economic foodchain if you have a little hustle
left. A bonus section called "How to Build Anything"
should instill confidence if you've never taken on a home
improvement/home creation project before, too.....
Click here for the index and details.
My commodity broker JB Slear and I
have written a simple book to get you started on high density
hydroponics. It's an example of how someone with a little
creativity, access to a few 'dollar stores' and willing to try
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Pass It On
A different take on things - that's what you'll find here most
mornings. If you know of anyone who might also like our
and send a link to them. Or, if you hated what you read,
send the link to all your 'worst enemies'. Like they say
in Burbank, "Ain't no such thing as bad press..."
week's report is always here.
June 10, 2010
Balance of Trade Up
We could start off this morning
with the Balance of Trade report fresh off the government's PR
Goods and Services
U.S. Census Bureau and the U.S. Bureau of Economic Analysis,
through the Department of Commerce, announced today that
total April exports of $148.8 billion and imports of $189.1
billion resulted in a goods and services deficit of $40.3
billion, up from $40.0 billion in March, revised.
exports were $1.0 billion less than March exports of $149.8
billion. April imports were $0.8 billion less than March
imports of $189.9 billion.
April, the goods deficit increased $0.1 billion from March
to $52.5 billion, and the services surplus decreased $0.1
billion to $12.2 billion. Exports of goods decreased $1.1
billion to $104.0 billion, and imports of goods decreased
$1.0 billion to $156.5 billion. Exports of services
increased $0.1 billion to $44.8 billion, and imports of
services increased $0.2 billion to $32.6 billion. The goods
and services deficit increased $11.8 billion from April 2009
to April 2010. Exports were up $24.7 billion, or 19.9
percent, and imports were up $36.5 billion, or 23.9 percent.
Goods (Census basis)
March to April decrease in exports of goods reflected
decreases in other goods ($0.8 billion); consumer goods
($0.7 billion); and foods, feeds, and beverages ($0.6
billion). Increases occurred in industrial supplies and
materials($0.6 billion) and automotive vehicles, parts, and
engines ($0.1 billion). Capital goods were virtually
March to April decrease in imports of goods reflected
decreases in consumer goods ($1.7 billion); other goods
($0.5 billion); and automotive vehicles, parts, and engines
($0.2 billion). Increases occurred in capital goods ($1.4
billion) and industrial supplies and materials ($0.1
billion). Foods, feeds, and beverages were virtually
April 2009 to April 2010 increase in exports of goods
reflected increases in industrial supplies and materials
($10.8 billion); capital goods ($4.9 billion); automotive
vehicles, parts, and engines ($3.4 billion); consumer goods
($1.2 billion); other goods ($1.0 billion); and foods,
feeds, and beverages ($0.3 billion).
line: We are still living on borrowed money used to pay
for the BOT deficit to the tune of about
$½- trillion a year. Got
Who to Believe?
Word this morning that BP shares
are in the crapper is being painted (at least in the pre-opening
talk) as being more than made up for
by Ben Bernanke's
pronouncements on Wednesday. But when I read his
remarks, the part that jumped out at me was:
"Our nation's fiscal
position has deteriorated appreciably since the onset of the
financial crisis and the recession. The exceptional increase
in the deficit has in large part reflected the effects of
the weak economy on tax revenues and spending, along with
the necessary policy actions taken to ease the recession and
steady financial markets. As the economy and financial
markets continue to recover, and as the actions taken to
provide economic stimulus and promote financial stability
are phased out, the budget deficit should narrow over the
next few years.
after economic and financial conditions have returned to
normal, however, in the absence of further policy actions,
the federal budget appears to be on an unsustainable path. A
variety of projections that extrapolate current policies and
make plausible assumptions about the future evolution of the
economy show a structural budget gap that is both large
relative to the size of the economy and increasing over
the primary forces putting upward pressure on the deficit is
the aging of the U.S. population, as the number of persons
expected to be working and paying taxes into various
programs is rising more slowly than the number of persons
projected to receive benefits. Notably, this year about 5
individuals are between the ages of 20 and 64 for each
person aged 65 or older. By the time most of the baby
boomers have retired in 2030, this ratio is projected to
have declined to around 3. In addition, government
expenditures on health care for both retirees and
non-retirees have continued to rise rapidly as increases in
the costs of care have exceeded increases in incomes. To
avoid sharp, disruptive shifts in spending programs and tax
policies in the future, and to retain the confidence of the
public and the markets, we should be planning now how we
will meet these looming budgetary challenges.
Achieving long-term fiscal sustainability will be difficult.
But unless we as a nation make a strong commitment to fiscal
responsibility, in the longer run, we will have neither
financial stability nor healthy economic growth."
sure how the hell this is supposed to be taken as reassuring -
since the expectation that budget deficits returning to lower
levels would be based on...since he goes on in (para 2) to admit
the current path is unsustainable and by para. 3 he
tumbles to the underlying issue which, as I see it is: "...the
number of persons expected to be working and paying taxes into
various programs is rising more slowly than the number of
persons projected to receive benefits...."
paragraph from this extract sounds like cheerleading, but at the
same time when there's cautionary advice about removing
stimulus, I scratch my head and wonder WTF are headline writers
thinking when they paint this as optimism?
of the dollar" meme has been in predictive linguistics for
years meaning that when it shows up it will be a monster
of an event and the number of people who are 'getting it' that
the whole Depression 2.0 phenomena may be a decades long
process is near zero.
near zero because I had a delightful note from an adjunct
professor of economics at a very good school who offers this...
I applaud your willingness to
look at the Great Depression (GD) with fresh eyes. I did
likewise when I returned to graduate school to pursue my PhD
in economics in 1995. My view was that perhaps by learning
more I could help stop the mess I saw brewing even then, and
to use the GD as a reference case for my dissertation. I
failed of course to stop or even slow the madness, but
that’s another matter.
In a paper published in 2004, I
took an unorthodox view of the GD by looking at exchange
volumes (trading activity) rather than the highly distilled
value-added approach of national income and product
accounting used by most economists. The 1930s contraction
looks a lot different when viewed in terms of activity. (If
you’re interested in reading the paper—which is long and, I
admit, tedious in parts—a copy can be found
here.) The bottom line, however, is that consumption
does not drive economic activity, production does. A
logical inference therefore (but one not explicitly drawn in
the paper) is that programs aimed at stimulating consumption
will be literally counterproductive.
I’ve since come to the
conclusion that Bernanke is not only wrong in his analysis
of the GD (based largely on a simplistic version of the
Quantity Theory of Money), but his prescription for
remedying today’s problems is necessarily bound to fail in
the face of a deflating credit bubble. Once started, there
is no way to stop a credit deflation, as the US discovered
in the 1930s, and Japan has since discovered over the
preceding 2 decades. The only choice is whether the process
will be fast and painful, or excruciatingly slow and
The essential problem is not,
in other words, a shortage of money per se’, but rather is
an impaired willingness and ability to borrow that
exacerbates the deflation of asset values, and that
manifests as falling velocity and credit contraction.
Lenders are (rationally) unwilling to lend because their own
books are impaired and must first be repaired by
write-offs. This write-off process has instead been delayed
by various government programs, exceptions, and bailouts.
In addition, potential borrowers are unable and rationally
unwilling to borrow because their capacity to service any
new debts is impaired by already-heavy debt loads, reduced
earning capacity from rising unemployment, and falling
collateral values. In short, the system must be purged of
its bad debts first, before any sustainable recovery can
begin. This purging process can be voluntary and thus quick
as in your excellent reference to the 1920/21 depression, or
it can occur through attrition, which can take decades; but
make no mistake, it will happen.
To put the matter more
colloquially, one does not save a drowning man by throwing
him a bucket of water. More indebtedness (which is what all
of the government’s plans and bailouts amount to) cannot
solve the problem of excessive indebtedness. The bailouts
in particular are quite literally a form of madness that
serves only to transfer the bad debts of the private sector
to the sovereign’s balance sheet. While I understand the
incentives and desires of creditors (worldwide) to socialize
risks in this way, what exactly are they counting on when
the sovereign goes bankrupt, as indeed they will? When
that happens, the rule of law (even in its currently
marginal state) goes entirely out the window, substituted
with retribution and mob rule, just as your and Clif’s work
Best of luck to you and yours
in the coming weeks, and keep up the good work.
which makes perfect sense, since if production is the
driver, then what I've been jumping up and down (nearly
screaming about) for the past 14+ years of writing this site is
Kondratiev was right when he explained that the boom and
bust is built into the Western economic system. Production
is rewarded with profits, production is overbuilt. Itr
then collapses and starts over, each time raising the general
standard of living, hopefully.
Keynesians, ain't buying it. Their solution is for
government to overspend, not realizing that it's the type
of overspending that matters, dear, not just if you push money
into the economy.
read this adjunct professor's paper, it helps to have at least
some clue what the term 'katallactic' means. To borrow
from an article on "Adam
Smith's Katallactic Model of Gambling: Approbation from the
Spectator", where he explains neatly that instead of
thinking about economics as starting from Robinson Crusoe on the
beach with a dollar somewhere, the kattallactic model of
economic participants takes the relationship away from basic
man-on-beach and supposes it's more like theater in that
depending on which side of the trade you look at, one agent in
an exchange is like an actor while the other(s) are like
surprisingly, the adjunct professor's paper cites Levy's
paradigm and offers that:
sum, the outcomes presented in this paper show that the
extent of the market, the katallaxy, contracted
substantially during the Great Depression, and that the
effects were differentially felt across the three main
katallactic categories of consumption, production, and
finance. The contraction in finance katallactics, for
example persisted almost without interruption throughout the
1930s, while consumption and compulsory transfers recovered
steadily. Exchange activity on behalf of further production,
however, remained uneven throughout the 1930s."
I like to
think of production, consumption, and finance as being like
three 'little theaters', too. The reason the US recovered
from the Great Depression at all, was the a huge 'audience' was
pulled into the 'production theater' first by the massive public
works projects of the 1930's (WPA, CCC, et all) and this massive
infrastructure production was then rolled right into war
production. Which not only led to high levels of
utilization by the mid to late 1930's, but made production
the 'dinner theater' with the most interesting play.
consumption theater started off with a flag-waving rah-rah first
act, and then a sis-boom-bang follow-on call Total War shortly
'dinner theater' which was scorned continued to be finance, and
when people left this dinner theater, disgusted with the
finance outcomes of the great depression, they scorned going
back in for another showing until a fair time after the war
ramble on endlessly about this, but the currently ruling
paradigm (e.g. 'the quants') seem to miss not only the
katallactic model in general, but they also (wrongly in my view)
attempt to assign numeric values to emotional responses
to markets which, while it may work now and then (enough to get
one a PhD in advanced bean counting) misses the whole longer
term emotional tones and undercurrents Levy's (and our
contributor) capture using a less numerically intense method
which takes in a much larger behavioral range.
other words, probabilistic economics (quant land) only works
when probabilities are stable enough to be useful. Toss in
socioeconomic disruptions of any magnitude and the probabilities
go out the window and everyone's left wondering "What happened?
Hey! We're out of range on this here variable..."
Which is why a big Redmond s/w company gets calls from quants...
"How comes the numbers didn't work? You come fix?"
a single reason for my longer term skepticism about recovery it
is that mock-production or pseudo production is no
substitute for genuine production.
fundamental problem is that what was once a high investment
physical machine - which caused the employment of potentially
thousands of people has been replaced with what I call pseudo
production which might involved a C++ or C# library which is
essentially free and thus the new production is
virtualized, yet adherents of the 'old/quant' model maintain
that it is of comparable value.
propose it is not and I expect our Adjunct dude would
agree. The unfortunate thing is that eventually as
the cost of pseudo production continues to drop, the
larger the pricing gap becomes until the whole economic system
implodes, such that just as the general economy is operating in
the unsustainable mode, so too, the underlying economic premise
of production (increasingly made up of pseudo production)
will not support irrational valuations and collapse becomes
probably figured all this out already, so on to our next story.
Defending from What?
Two sides to every story - and
often times three, or more, as any reporter knows. The
report from NORTHCOM that "Units
make history with Air Forces first homeland defense operational
readiness inspection" has got a tremendous buzz going among
conspiracy-minded types who think the greatest enemies of
America are the ones who paid for bin Laden's training and such
when the Russians were in Afghanistan. "Blowback" is a
pisser, for sure, but regardless of who writes the checks, the
practical is that if the unthinkable happens, times will be
awful and the question is do you trust your (well armed)
countrymen to treat you any better than the military if the
Something to ponder, since few
people tend to really think through what conditions 'on the
other side' could be like.
your head how it was Goldman was able to make such deft trading
decisions on BP? Read the ZeroHedge piece under the
of Goldman Sachs International Was - Until Last Year - Also
Chairman of BP" and see if the dots connect...
Leaves 114,000 iPad users
exposed according to a report.
I'm a cache-clearing, cookie wary (rabid) Maxa Cookie Manager,.
Zone Alarm, and more user? The web is about as safe as
trolling around a third world barrio with hundred dollar bills
hanging out of your pocket is why...
Twitter's role in helping to get the mass protests underway in
Iran last year was exaggerated says an editor in the Middle East.
Oh? I doubt it...this is where 4gen warfare happens these
Madness on Bordering
upset with the shooting of a
14 year old by US Border Patrol.
that Goliath was brought down by stones, so they do qualify as
deadly force even without a sling to launch them.
illegals are reported leaving Arizona with their new tough
immigration laws about to go active says a USA Today report.
are up again today, and there was a sharp job in jobless filings
in the latest reporting week:
In the week ending June 5, the advance figure for
seasonally adjusted initial claims was 456,000, a decrease
of 3,000 from the previous week's revised figure of 459,000.
The 4-week moving average was 463,000, an increase of 2,500
from the previous week's revised average of 460,500.
The advance seasonally adjusted
insured unemployment rate was 3.5 percent for the week
ending May 29, a decrease of 0.2 percentage point from the
prior week's revised rate of 3.7 percent.
The advance number for
seasonally adjusted insured unemployment during the week
ending May 29 was 4,462,000, a decrease of 255,000 from the
preceding week's revised level of 4,717,000. The 4-week
moving average was 4,617,500, a decrease of 49,250 from the
preceding week's revised average of 4,666,750.
The fiscal year-to-date average
of seasonally adjusted weekly insured unemployment, which
corresponds to the appropriated AWIU trigger, was 5.120
for round 2 of 'running of the shorts'...and no, I didn't sell
my call options, damn, damn, damn... oh well, WTF...
and save section ====
Why NOT to Have
Bubba, jail break..."
was my neighbor Cale about 2 PM Wednesday sticking his head into
my office to advise me that "You got about a dozen, or more,
goats headed up the road....you want me to help you round 'em
riding picking truck and me saddled up on the Kubota, we managed
to get the runaway goats back onto the property and heading up
toward the feeding area. Since it was starting to rain, I
thought my problems would be over since it was starting to rain
and the goats tend to stay in their shelter being four-legged
So by 2:30
I was back to work and at 3:30, Elaine popped her head in the
office to announce "Dan [another neighbor] just dropped by to
say the goats are now across the road..."
enough, grabbing the pick-up this time, Dick Chinney the leader
of the goat gang. had led a harem of about 14 females onto the
unfenced property across the street on the low side of the
property. Figuring that the animals would come to food, I
returned to the house, got Elaine, a big bucket of feed and a
feed scoop and returned to the scene of this latest 'jail
enticing and I was all set. 15 goats were following me
down the property line in the wet grass and mud, I was tossing
out the odd small pile of feed for the goats to argue over and
then I'd move on another 200-feet, or so, and throw out some
additional feed, leading them toward the feeding area.
until I got to the 'Goatly Gulch'. This is where the trail
along the fence dips down about 30-feet (at a 30%
grade, suitable for 4X4 tractors, dirt bikes, but not something
you would take a car near) and crosses over a creek which is
running nicely thanks to 2.74 inches rain in the past 24-hours
according to the Oregon Scientific digital flood victim.
It's here, about 1,100 feet from
the nearest outpost of civilization in any direction that the
goats made a charge for the feed bucket being held over my head,
and while turning to look at the approaching hoard, I managed to
come down on my left knee in such a way as to give it a serious
A flick of another scoop and the
would-be tacklers were diverted, but now I was sliding down a
muddy slope, cursing myself for not learning to skateboard which
I'm sure would have tuned-up my sense of balance for such
The instant of the sprain was one
of those events that I literally felt the tearing as the leg
twisted. Nossir, no fun now. But out in the wild you
have to suck-it-up and keep going...no options.
Limping real badly I made it
up the other side of Goatly Gulch, and with Elaine's help (she'd
driving the 1/2 mile from the jail break site over to the
feeding area and was calling whoever would answer to come get
some real chow.
The next 45-minutes was spent
yelling from feeding area to fence repairs trying to get repair
the fence and get some small goats who had by now wandered out,
back into the inside of the fence; just the thing to attract all
30-odd goats who were intensively curious who that cussing,
swearing, blasphemer was that was throwing around nylon
tie-wraps since he didn't have his baling wire handy and limping
like he'd lost a leg in a motorcycle accident, or something.
Next scene, a fine dinner, a glass
of wine, a couple of ibuprofens, and off to bed with the leg
bound up with an ice pack wondering how Thursday morning would
By 4:45 AM, Elaine had managed to
figure out how to help me get my left sock on by tickling my
foot (ok, I'm ticklish on the bottom of my feet, wanna make
something of it?) which resulted in an extremely
interesting cross being laughter from the tickle, more than
offset by the now softball-sized knee.
In a true demonstration of
devotion, we managed to get out to my office where I'm sitting
in absolute fear of the time when I'll have to rush off to the
'throne room' for the matutinal visit.
All of which is my first painful
point of today's report: While goats may seem like the
perfect ag machines, there are times they are not. The old
saying "If you know someone with no worries, buy them a goat" is
If you're a doctor, encourage your
patients to buy goats, as it should provide a fine income stream
into the future. Similarly, you may wish to invest in
companies that make hydrocodone for idiots who raise goats.
Goat fence manufacturers might be another fine long-term
investment, as would be makers of instant ice packs, elastic
bandages, and ibuprofen.
There may be times you think to
yourself "Gee, George & Elaine sure have a neat life out in the
wilds..." Which it is, from time to time. But given
the choice, at least this morning, I'd rather hand over a wallet
to a stick-up artist on some city street, than face the muddy
gulch while being run down by 1,900 pounds of horned snorting
demons. Stick-up artists are much more reasonable in
comparison, so maybe there is something to Big City Life to be
appreciated, after all.
Pieces of Eight
"Anyone who can forget about a
thousand dollar check, has too much money!
No, but they may be seriously
attention-deficit. More abuse?
"Anyone who buys lottery tickets has too much money..."
Naw, they're just natural born
Limiting Loan Size
Remember the other day I mentioned
that government must have some complicity with the
loan/highwaymen who regularly gouge consumers while government
orchestrates the whole thing having been paid off with votes,
campaign contributions, and whatever?
oil fumes must be wafting up your way. Huh? Are you nuts or
smokin' what George? My God man! A years wages for a car and
four for a house. A fourth and two maybe........If I took on
that much debt I'd be on the street inside a half a year.
And I have an above average income. Debt makes one a slave!
Only buy what you can pay cash for except maybe a house. And
these days, even that latter one may not be the smartest
thing to do."
Which really was my point.
Speaking of cheap vehicles, my son
the EMT up in Seattle was going to buy a 150cc scooter to flit
from here to there. Went into a scooter emporium and
negotiated a good deal on a new one - about $3,500. (I
told him due to their low center of gravity, he'd be much safer
on something like a 350cc Honda, since you can throw a bike
around better, if you need to...).
Once upon a time I tried my hand at
flat-track bike riding. Got so I could get the iron shoe
on, get the bike 'crossed up' coming out of corners, but that
was back in a different era.
Having at least some sense,
he went back home to think about it and happened to be surfing
Craig'slist. Found an identical unit with only 400 miles
on it for $2,200.
Mucho better, brings a cash deal
into range and promises to help him remain solvent...and it goes
to show what the discounts are like in the real world compared
to the showroom. Your mileage may vary.
June 9, 2010
Although Gold has hit a new record, it was trading down
about a buck or three earlier this morning.
Something you might
want to keep an eye on are what the big dealers are actually
paying for gold, relative to its quoted price. A check of
Kitco's buying side, for example, showed that if I were to
.999 Gold Maple this morning, it would fetch 1,229.90 which
is only a $5.70 discount to their posted spot and the selling
price to them.
On the other hand,
if you were buying at these levels,
quote this morning was $1,321.66 which is an $86.06 premium
to spot at the same moment. What this says to me is that
the published spot is very close to what existing gold could be
sold for, but to buy back a position would cost a lot more.
A number of readers
have asked "How could Robin Landry think that Gold could drop to
the $700's?" The answer is simple: It could, but
takes a minute to think through the meaning.
Suppose, for a
minute, that we are presently in and go through the development
of a 1930's type deflationary economic collapse. What
would happen? Availability of money simply dries up.
Therefore, when there's not as much money out there, you'd see
falling prices for many things and in the extreme case, say a
90% collapse of prices, what cost you $100 at the grocery store
could drop to $10.
Right now, an ounce
of gold could take you on about 12- $100 trips to the store for
groceries. In a deflationary collapse, gold might drop to
something like $750, but instead of buying you 12 trips to the
store, gold would now buy 75 trips.
So when you're
pondering what kind of assets to put your hard-earned dough
into, ask yourself "How will my investment do in a highly
inflationary environment? And then ask, how would it do in
Either way, seems to
me that gold will be a better holder of value than this 3 by 5
card and Bic roller ball pen I'm holding, since that's what
paper money is: a kind of IOU which is supposed to store
value over time.
However, the truth
of the matter is that even including the deflation of Depression
1.0, the purchasing power of paper money has been watered down
by - on average - 2.3% per year using the Fed's own numbers.
This is where
modern-day economics doesn't do a very good job of educating
people. A central bank that's in the money management
business can do either a very good job of creating money of
lasting value OR it can focus on creating a stable
economy. The problem is, it's not a choice of both,
since solid money (e.g. gold) severely limits the money-creation
powers which might - arguably - be needed for government to
overspend its income in order to fight a severe economic
downturn...like about now.
Worth reading, while
the market continues up - at least for the early going today -
Gordon T. Long's piece about markets under the headline "Extend
& Pretend: Confirming the Flash Crash Omen".
A higher open seems in the cards, but is it the start of a
long term bull market? Nope, just the strong hands selling
to the weak...
Brazil with an economy growing 9%. Gee, just think
what we could do if self-sufficiency became a real agenda item
here...but not while Washington's in effectively up for bid by
the special interests...
By contrast there's
Anthony Fry with this juicy snip from CNBC: “I don’t want to
scare anyone but I am considering investing in barbed wire and
guns, things are not looking good and rates are heading higher,”
Along in here
somewhere, I dutifully say "Quick, look surprised!"
How's this for a
shocker headline? "Taliban
using HIV bombs".
If that's not enough
to start accumulating defence stocks, how about "UN
is Set to Vote on Iran Sanctions"?
attack NOTA convoy in Pakistan; 7 killed."
The big picture
stuff continues to build tensions as "Turkey
condemns Israel despite declaration veto".
Buried at the end of
an NPR story on Tuesday... "The
White House says National Guard soldiers may be deployed to help
people fill out the paperwork BP is demanding. " And
that brings us in this morning's 'news rotation' to....
Interior Secretary Ken Salazar will be on the hot seat as
Senate hearings into the Gulf Disaster in development continue.
Having the Senate
look into the mess is about as useful as putting me on
Dancing with the Stars...what should IMHO be happening is
impounding BP dividends and starting action to seize the
company for damages....and finding out why all those odd
transactions just before events...
The BBC report "Snakes
in mysterious global decline" really has a simple
explanation in my book: All the reptiles have gone to
Washington and other global power centers...
which...buried at the end of an NPR story on the Gulf: "The
White House says National Guard soldiers may be deployed to help
people fill out the paperwork BP is demanding."
12 states held primaries on Tuesday. Not as much "vote
'em all out' as I expected/hoped for, but everyone knows votes
are for sale, like everything else. Just takes the bigger
media budget and better creative...
In my afternoon
martini moment I often ask those meaningful questions about
democracy - like "Would George Washington buy cable, or would he
do a second mass mailer with a lapper asking for contributions?"
==== snip and save
When It's a
The headline over on
the Yahoo - Tech Ticker above a Henry Blodget story
"REMEMBER: In 1930, They Didn't Know It Was 'The Great
Depression' Yet" brings to mind the ugly fact that most
people have little to no - clue about where their country,
world, or even family, for that matter, sits when it comes to
Long the bane of
"serious" (number-crunching quants) of finance most academics in
the field disavow the reality of cycles
When the market
broke from the September high in 1929, it would be several
years before economic reality dawned on most people.
And, even in the heights of the Great Depression, the general
unemployment rate was under 25%.
What made the
depression of the 1930's was a mix of events: First, there
was the collapse of the stock market, then there was the
repossession of homes and farms, a generalized shortening of
food, and the unavailability of credit.
The key thing that
separated the Great Depression from other periods was the change
in public attitudes toward money. There had been market
breaks previously, include the infamous break from 1919 to 1921
that took 46.6% off the Dow. Looking back over the data,
I'm planning to do an update on the decade-plus view of things.
One thing is clear
in the Aggregate Index chart, which I've been posting for years,
is that if you look at an equally weighted index (equal dollars
in the Dow, S&P, and the NASDAQ Composite since 1999, there's
this sneaking suspicion that future history writers will be
comparing the internet bubble burst of 2000-2001 with the
collapse of the 1919-1921 period.
fashion, the decline of the Dow in 2000 when the weekly high
closed at 11,722.98 in January 14, 2000 to the weekly close of
7,528.4 the week of October 4, 2002 was a crash of 35.8%, but we
may get a little clearer picture by looking at the S&P 500,
since it's a broader measure than the Dow.
Here, we see an S&P
high of 1,527.46 the week ending March 24, 2000 and a bottom of
800.58 the week ending October 4, 2002. T%^his decline of
47.58% of the S&P not only sure starts to look like the 1919
market break, but in addition it may explain where more than
half your retirement went.
The decline in tech
stocks as measured by the NASDAQ was from a giddy 5,048.62 the
week ending March 10 of 2000 to a lousy 1,139.9 the week of
October 4, 2002. That's a 77.4% decline.
On a high-to-high
basis, the Dow peaked before the 1919 to 1922 decline at 119.62
in about June of 1919. We also know that the Dow peaked in
the first week or September of 1929 (9/2/29 at 376.29).
Call it 10 years and a couple of months.
Since we know that
the Dow peaked in early 2000, when we add 10-years to it, we see
2010 (mid summer) as a possible peak when stocks might
run up one last time.
Does that make me a
bull? No, absolutely not. Cycles are general
timing clues only and each cycle has a different flavor than
all preceding events.
Still, since we have
a little data to look at, we could observe that the decline from
all-time levels in 1929 to the depths of the Great Depression
came out to 148 weeks. Since the market peak in
October of 2007 (14,093 and change) 148 weeks is something to
look at...and for what it's worth, 148 weeks brings us to July
9th, right around our July 11th change period in Clif's work.
I guess the takeaway
is that some researchers (non-quants) look at the Great
Depression as really a two-part affair: The early bubble
and the greater bubble. It's even in a proposed American
History curriculum (Essays in American History by Richard
Bernstein) which begins its Boom & Bust 1921-1933 section with
textbooks treat the Great Depression as a single entity,
spanning the years from 1929 through American entry into the
Second World War in 1941; they then divide the years of
Franklin Delano Roosevelt in half, distinguishing the
domestic era of the New Deal (1933-1940) from the era of the
Second World War (1939-1945). I propose instead to break the
Depression in two, using Roosevelt's election as the
dividing point, treating the years of boom and bust
(1921-1933) and the Roosevelt years (1933-1945) as distinct
seems to comport better with history as the American people
experienced it. They saw the period from 1921 through 1929
as an organic whole (the "Roaring Twenties") and they saw
the slide into the Great Depression from 1929 through 1933
as a grim, ironic coda to that period. The transition to the
Roosevelt years marked an extraordinary change in the
American people's basic thinking about government and the
economy, and an equally remarkable change in morale from
fear and despair to hope and confidence. It seems only
fitting to make these points explicit in our periodization
-- to enable students to understand the past the way those
who lived through it did when that understanding makes good
historical sense. "
Thus, if you've been
reading writings on the coming Greater Depression/Depression 2.0
and have been asking yourself "Where's the real bloodshed
financially?" the answer is simply stick around for a while.
There's a pretty
good chance that the 'double bubble' and the following
double trouble is manifesting and with any luck, the tipping
point in the linguistics out in November will only be a
global financial collapse since recovery from that, while
painful, would be much less so than a world war.
We can only hope,
What would a global
monetary collapse be like? I'm working on that for
Peoplenomics this weekend. But
the headline that the federal debt will rise to $19.6 trillion,
and will be way past GDP (in the $12-$13 T range) certainly
indicates that this might be a minimal kind of change/tipping
point expectation for this fall.
Not to grind your
face into what may be coming, but two stories you should be able
to connect the dots are these:
The analyst offering
the advice is Mark Steele who works where? BMO Capital
The Indenture's Life
- Modern Feudalism
officially abolished in the US back in the Civil War era; or was
it? To my way of thinking, any time a man or woman is
placed in a position of impossible debt, that's the functional
equivalent of slavery. Or, as one of my friends calls it
cheerfully, "the new Corporate Feudalism".
A couple of
definitions of feudalism to roll around. One is that it's
social system that developed in Europe in the 8th century;
vassals were protected by lords who they had to serve in war"
while another offers that "Feudalism is a decentralized
sociopolitical structure in which a weak monarchy attempts to
control the lands of the realm through reciprocal agreements
with regional leaders. ..."
Since we live in a
world of corpgov warfare (which is what all those wars in the
sandbox are really about) and since reciprocal agreements with
regional leaders is what the EU zone, the Asian trading blocks,
OPEC, and the infamous New World Order are analogs, seems
feudalism is a good fit.
Wasn't trying to do
anything revolutionary in my remarks about indentures to
government debts for things like student loans yesterday, but
apparently that resonates at some level:
Love you man.
I just found it amusing that you
would pose the question, "Should the student (who's given
four years of life to school) additionally be held to
indenture to a student loan based on government missing its
Personally, I gave many more
years than that. But that's beside the point. The real
question to ask is:
Wait a minute. Wasn't this sort
of concept supposed to have died in the 1800s? In my youth,
I thought I was living in the land of the free. In a society
with human rights, the creditor should have equal or more
responsibility to determine the likelihood of repayment. In
a society with human rights, there should be no such concept
as a loan that the debtor cannot default on. But that's
exactly what we have with student loans. We have a gravy
train of cash funneled to universities while millions of
bright young people enslave themselves for life.
Or now, there's an option to get
out after making "minimal" payments for 20 years. Of thank
you, master. I have the dream of one day being free. I
promise to be a good slave until then and give you what
little money I can spare. (Never mind the fact that at the
end of the 20 years I will have spent ALL the productive
years of my adulthood in slavery.)
Even if there were plenty of
great jobs waiting for every graduate, the concept of the
indentured servant is abhorrent.
Thanks for bringing up the topic
As I said, not
trying to be revolutionary here, but if the FTC was really
protecting people, they could be thinking of anti-screw-job
legislation to regulate payday loans (another reason I am voting
against my incumbent congressman this fall - he's on the wrong
side of that one) and in addition, there should maybe be federal
guidelines that would prohibit a lender from loaning a person
more than one year's worth of after-tax income to buy a
car. Or, no more than 4-times annual household income
after tax to buy a home...and so forth.
Not really. The government already makes recommendations
about food and nutrition with the RDA (recommended daily
allowances) for vitamins (which they undershoot on some key
ones, but that's another rant), so why not debt? It's a
lot more dangerous to your long term health (stress, etc.).
My point is "Where
has been the quid pro quo (something in return for)
participation in the debt system as an indenture? Think
back on how much junk you bought and were still - thanks
to easy credit - still paying for when it stopped working.
worldwide seem ready to shirk this responsibility to curb
cannibal corporatism's predatory product quality/lending mess.
instead, they focus on the tasks of feudal management:
making up wars to fight and cutting deals with foreign interests
often to the detriment of its subjects.
Time to Leave
"Remember when Jackson and Jones
came up with "We are the World." About that same time a now
dead comedian, Sam Kinison, had advice for the starving.
"Don't send them food, sent them suitcases." His advice to
the starving masses in Ethiopia was to, "Get out of the f***ing
desert!" Sam wasn't known for his warm fuzzy comments.
Anyway.... Every time I see
where the oil spill is and hear the complaints of the
residents about their way of life coming to an end, I think
of Sam, his advice and wonder. We have had Katrina and now
this. Could it be a second nudge to get people out of the
area and to safety? I wonder if you or Clif have seen the "I
Am America" map? Look at the gulf state of Louisiana.
Maybe there have been two large messages sent to the
residents to move. I know that thought process is way out
there, but sometimes you just have to wonder.
Reminds me of joke
(or is it really?) about the rural family caught in flood
that was offered three chances to leave by passing rescue boat
crews. Finally, after all the rescue workers had left, up
to his ankles in water at the very peak of what was once a roof,
but was rapidly going under too, the father of the family
screams to the sky "Father, why as thou forsaken me?"
The skies instantly
part and a huge booming voice from everywhere and nowhere says "What
do you mean? I sent three boats for you..."
Not sure I'd be
waiting around for a third boat if we lived closer than the
450-miles away in what Texans laughably called 'mountains'.
Them Crazy Rights
Another story about
putting 8's in your wallet for our growing collection of WuJo
material on the topic:
"Hi George, Just wanted to share
with you my experience with the magic eights you've been
The first day you mentioned
putting an eight in your wallet, I did it. I had never heard
of it before but thought I would give it a try. That night I
got home from work to find out that the air conditioning guy
that had come to fix our air left an estimate of $1000 to
fix it. (new compressor) That next day my washing machine
broke and I also found out it would cost me around $500 for
repairs on our van......not so lucky with the eights... Then
when you mentioned putting 3 eights in your wallet in the
shape of a pyramid I thought, well, can't get much worse,
might as well try it. Last night I came home from work and
found a letter from FedEx. It had paperwork in it to do a
loan modification on our house. I had not applied for this
and was a little confused. We had been starting to fall
behind a little on our mortgage since my husband has been on
unemployment since November. With 4 kids its getting harder
to make ends meet. Anyway, the modification letter stated
that if we wanted to accept it, they would take $13,000 off
of the principal balance of our loan and make our interest
rate 4% (it was 5%) so all of this will also take $100 per
month off of our mortgage payment. Sounds a little sketchy
at first but it was from our loan company with our loan
number and everything. Once I talked it over with my parents
we figured it was some crazy crap Obama had decided to do
with the tax payers money and thought, if we don't take
advantage of the deal, it would just go to someone else
anyway so we might as well, considering we could use the
help right now. So in all.......One eight cost me over
$1500....Three eights in the shape of a pyramid gave me
$13,000 and saved another $100 per month for the next 20
years or so! Thought you might find this interesting. Keep
up the good work on your site. I look forward to it every
After I put three eights in a pyramid arrangement in my wallet,
I discovered a check for $1,000 that I had overlooked.
Unfortunately, the check had been shoved behind credit cards and
such and is way past expired. universe trying to tell me
something about working too hard, spreading myself too thin, and
not keeping my wallet cleaned out.
I'll check the
lottery tickets I found later on this week. Who knows,
might win $8 or something...
Tuesday June 8, 2010
Bin Laden in Iran?
Not that we really
need the distraction of a major war in the Middle East, but
events are really starting to pile up in a way that certainly
fits in with the predictive linguistic possibility of WW3
coming along about November 8-12 this year.
As if Iran's threat
play guard around Gaza protest ships and
sending some Red Crescent Society boats, too, but now
well-connected news & intelligence site Debka.com is reporting
in this must-read article that "Osama
bin Laden and top aides are hiding in Sabzevar, Iran."
If you're thinking
"Where the hell is that?" The answer
may be found on this Google map which puts it maybe 300+
miles east of Tehran, a hundred odd miles from the Turkmenistan
border and maybe 200 from Afghanistan. Close enough to
call in plays from the sidelines to al Qaida types in
You might recall
in Iran, fearing protests, plan state memorial" in Sabzevar
back in May to mark the passing of Imam Khomeini.
percolating in the region include the
Iranians saying they will not swap a nuclear scientist that
the West nabbed for three US hikers who are being held.
Then, while Israel
continues to avoid signing the nuclear nonproliferation treaty,
the IAEA is calling for more cooperation from Iran on nuclear
issues, which judging by how pressures are building, won't be
showing up any time soon, since Iran's likely to claim something
like "You can inspect more when Israel opens up their
Dimona facility to inspections" where, as you'd guess, there
are probably 300+ nukes ranging from suitcase-sized to way big
As an armchair
tactician, the Israel's have now got two reasons to go
into Iran...fears of someone else getting nukes and bin Laden's
alleged presence. Toss in reason #3 shortly in a possible
Iran/Israel standoff at sea and you've got the makings of the
five months of saw-tooth release language in Clif's modelspace
which lead us to...well, don't want to ruin your day...but you
drop came calling on the market in the US yesterday. Even
though the futures are called "mixed" in some reports, I
wouldn't be too surprised to see things continue down today.
For one thing, the Euro markets are down by amounts suggestive
of another 50-75 points off the Dow - or more.
Then, there's the
latest from Robin Landry to consider in a note to his investment
colleagues last night:
"The market decline is
continuing to follow my expectations but we are nearing a
possible short term bottom which will allow a rally that may
scare some. The best count says we are in a small 5th wave
decline that I believe will reach the 9500 area before a
rally of about 300-400 points in the Dow. Once this bottom
is in, and the rally begins, I will try to narrow the
targets for the rally. One thing to keep in mind is that
this is just a small rally and we are going to continue to
decline to the 8500-8100 area before Intermediate wave 1 of
P3 is completed if my count is correct. The rally for
Intermediate wave 2 of P3, will be similar to the rally from
January 2008 to May 2008 which was Intermediate wave 2 of
P1, the market then turned down in Intermediate wave 3 of P1
from the high at 13132 area to the low on November 17 2008
which bottomed around 7450 area of the Dow. That was a
decline of around 5700 points in only 6 months. In other
words, we have a long way to go in this bear market. Since
P3 is usually larger than P1, surprises will be to the
downside and the rallies may not be as large as expected.
CAUTION is warranted. As always, questions and comments are
welcome, and I will answer as time allows.
This is not
investment advice - see this site's disclaimer! On the
other hand, when you look as some of the comments about tactical
trading in this morning's "coping" section,
you might be able to infer when I will activate my next tactical
You notice that "Leader
Capital Markets CEO commits suicide"?
Or, of another sort
in the article "Banking
System Collapse: Wake up America Your Banks Are Dying."
The Higher Ed Bubble
financial bubble you might want to keep an eye on that was
written up in the Washington Examiner Sunday: "Glenn
Reynolds: Higher education's bubble is about to burst"...
Having spent some
time in one of the leading software companies providing higher
education management software, I'm relatively familiar with the
dynamics of higher ed, especially the student aid part.
Stories about the
higher ed. bubble get me to thinking, how long before students
who are unable to find jobs for which they went to school file a
class action lawsuit challenging their indenture (which includes
having IRS tax refunds withheld) if the government turns out to
have been seriously wrong about the type of jobs that the
government represented would be available when students made
a good-faith decision to go out and put themselves in hock for
Think of it this
way: What if we rolled back the clock to the fall of 2002
and looked at the Labor Department's Occupational Outlook and
cited it as the basis of a decision to go to college or a tech
school? Just for fun, sport, and amusement, I bought a
copy of the 2002-2003 Occupational Outlook on Amazon for $5.17
and it will be a topic of a future Peoplenomics report....a
short analysis of what the government represented as
likely to be available, versus what actually came along.
This is a personal
issue for me, since I helped put one of my daughters through
school so she could become a chef - she won a few awards, in
fact. But since highly qualified chefs aren't in super
demand (or demand as forecast when she was looking into it)
she's now working in an office job in an unrelated field.
Except, of course, she has this huge student loan debt.
Won't go off on
government's potential liability until I go through the data,
but just seems to me that this could be one of the all-time
monster class action suits for those who took the government's
projects, spent tons of money, and then got to the finish line
only to find there were no jobs there.
Should the student
(who's given four years of life to school) additionally be held
to indenture to a student loan based on government missing its
Just something to
think about. More research to come...the $5 worth for the
2002-2003 OL book seems like a worthy research expense.
Better Late Than
I noticed that the "White
House is directing agencies to cut their budgets" which
likely won't stop this financial Titanic from sinking, but it
might give the crew one more chorus from the band to rearrange
the deck chairs.
Weather Enterprise forum 2010" which is coming up at the
National Press Club today. Why, if I had some way to get
to Washington, I'd ante up the $50 to attend a few sessions,
since space weather could be a major/huge/calamity on the
backside of solar Cycle 24, out in the 2013 range...
Every month, reader
Anthony Ring plugs his excel macros into the USGS earthquake
database and gives us a check on how trends are doing just
underfoot. Not getting much press elsewhere, but I noticed
the moon was into its final phases last night and since there
may be some correlation between earthquakes and full moons...
getting into a big discussion of this (now) here's the latest
chart of how things are going:
No, I have no idea
why else isn't finding this seeming upward trend in 6.0+ quakes
since about 2007 is curious (if not downright worrying) but
there it is....some real data to ponder. Especially if
you've read about 2012 expectations... Oh, and by the way, you
don't think this might be a contributor to the BP accident (or
was it?) do you? Seems to imply earth has a flaky
crust...some clever wording which ought to drive Clif and Igor
off to make pies in a hurry while we still can.
=== snip and save
ATactical Trading Discussion
Not to overwork my
discussions with my friend
but the whole purpose of the UrbanSurvival and Peoplenomics.com
websites has been to help people make it through one of the most
difficult periods in American financial history...which, in case
I forgot to mention it.... is going to get even worse as the
year goes on.
Most of our assets
are split in a seemingly paradoxical way: Some in physical
gold and silver and a good chunk in cash & inflation-indexed
treasuries. The reason this works for us is that in the
event that huge inflation comes along, as it may later this year
when supply chain increases telegraphed by the Producer Price
Index upward moves actually start to show up in stores.
For the most part, I
will be looking for these to be of the food and staples variety,
but even some electronics are bound to go up in price, although
as a slower rate - because they are not strictly necessary
for personal survival, no matter how "hooked" a person gets on
the sparklies, glitterati, and aps for your ?Phone.
We may be getting
close to time for me to lock in some profits and ,walk away from
the table for a while in the stock market. But, how to do
financial stock I've got a few shares of gives a fine (and to me
very real) example of how to exit gracefully.
Say that on Friday,
May 28, I bought a particular (financial inverse stock which
goes up when the general market goes down) stock for $14.23.
Assume that I'm
telling you the truth that this stock closed yesterday between
$17.35 and $17.40. Yes, that's a 22% increase in seven
trading days - which is a reasonably good return for less than
two weeks in the position.
Now comes the
problem, however: How do I lock in the profits and
minimize my non-participation risk while at the same time making
an even better return?
risk is a term you're not likely to hear from your broker or
money manager. Maybe because it's a 'Ureism" that means
the risk of being out of a market when it's about to make a BIG
move which could be profited from if you already know or sense
which way the move will be.
None of the
following is financial advice - this is purely and educational
discussion of a theoretical way to make money - see this site's
disclaimer if you want an extra helping of disclaiming to go
along with this.
My planned exit
strategy is simple: I will likely sell some covered
call options against the stock for July. As of
yesterday's close, for each 100-shares of stock I owned, I could
sell a covered call option (meaning I really own the underlying
Let's see what
happens if the stock closes above $18 in July and I had written
an $18 covered call: What I would (in effect) be
doing with the call is selling the stock on option expiration
day in July at $20 per share. That's $18 in July and
$2.00 for the option or right to buy at $18 exercisable July
I'd get some of the
money when I wrote the covered call option. (About $200 if I did
it at yesterday's prices...) The rest would come in July
around the 21st when the agreed upon sale closes at $18 and I
would be paid $1,800 for each block of 100 shares that I'd
written covered call options against.
Now consider what
happens if the stock doesn't hit $18 which is the option price.
Yes, I might still be able to sell that right (call
option) at $2.00 to net me $200 for each 100-shares I'd
written covered calls against.
Except that in this
case (with the stock at $17 now, remember) the option would
never be exercised so I'd still own the underlying
stock. It's just that I'd have to suffer through
having the extra $200 in my account for each option written at
the $2.00 level.
are a couple of whats to think about the $2 +$17 price. I
could look at it as making my effective price should I sell the
stock $19, or more traditionally, it would simply lower my
cost basis for the stock from $14.23 to $12.23
The difference in
returns is nice, too: Without writing the covered option,
the simple buy / sell gain would be $17/$14.23 or about 19.5%.
However by writing
the covered call, if I sold at $17 after writing the covered
calls that effectively lower my cost basis, the gain fattens up
to 39%...which now has my interest.
So, what to do about
'non-participation risk' when the market could go lower?
OK, if I wait for
Landry's expected drop to the 9,500 range, I might be able to
sell July 20's and once we get near options expiration for this
month (a week from Friday, or so) then I might be able to cover
with 18's...timing in does matter in this stuff, but the idea
this morning is to at least put the tactic out for
Stocks never move in
one direction all the time. So, what I could do is wait
for a pullback in the market and buy a call option at a
lower strike price, say a $16 call and with any luck at a lower
cost than what I got for writing my $18 call option. Or if
the market's going down more in the next few days, sell covered
$20's and buy back $18's. Or $22's and 20's...all depends on how
nuts things get.
Then comes July, I
have 'upside' insurance in place. Say the underlying stock
zooms up to $21. Now, instead of delivering the 100 shares
of stock, I simply deliver by $16 call option and pocket a bit
in the process. In the end, I'll still have the underlying
stock, the exercised $16 calls cover the $18 call I'd written,
and my non-participation risk has gone to zero if the stock
If the stock doesn't
pull back to where I can get a $16 July call on the cheap, then
by writing the covered $18 call for $2, I'd effectively have
sold at $20 which means a lousy 40% gain for 3½
weeks of exposure. Oh damn.
"What does all
this after to do with Howard?"
Howard's got another fine example in his article "Legging into
Verticals" (meaning vertical spreads between the covered
call option written price against the common which is then
covered by a cheaply acquired lower cost-basis call at a
lower strike. Played well enough, long enough, you end
up playing with house money. Neat, huh?
Not for casual
market gamers, but since Elaine wants a four-place airplane if I
get one at all, and since a buyer for "the red car" has
materialized, something like a mid-priced/used Cessna 172 or
maybe even a C-182 is looking like it's in the cards.
Since I could be
loaded to the gills with income as a result of these fine
trading strategies, that brings us to the question of
IRS Section 179 depreciation on airplanes. Still checking on
this, but near as I can figure it, an airplane used 100% for
business could be written off in one tax year when used 100% for
business up to the 179 limits....but like I said, still
Given a fairly high
tax bracket, the tax consequences effectively lower the cost of
an aircraft if I have this all right) by 30% (or whatever your
All of which gets us
around to follow-on discussion of how the post Reagan era has
led to what Howard thinks of as "asset stripping" by business
owners. Can't argue that one, except to say that the tax code
certainly seems to encourage 'creative' expenses and that things
like business-use aircraft might be viewed as 'just playing the
game' played by the PTB types several levels up the economic
"With Liberty and
Tax Breaks for all...."
Speaking of planes
and such, if I had a C-172, I'd sure be tempted to fly up to
Breckenridge, CO to catch the opening of
Ray Kurzweil's documentary "The Singularity is Near" at the
Breckenridge Film Festival.
Wonder how much will
be given to the downside, namely that the Gulf may be an
extinction-level event, and if that isn't, there are plenty of
other life-ending threats out there, like WW3 in November, for
Wouldn't mind become
Lies Threaten your Savings" seems obvious, but in the rush
of day-to-day living, the big stuff just gets overlooked,
sometimes, I guess. Short read - you can deal with it -
Pieces of Eight
Wow...set an alarm
clock for 8 PM tonight if you're on the East Coast or even this
morning at 8 if you're on ther West Coast and reading this
before 8 AM... if you've been following our discussion of
putting 8's in your wallet:
I put an 8 in my purse at 8am (BST)
this morning on June 8.
Then I realised that 6/8/2010 =
17 = 8
So I got 8888.
Any of your readers wanting to
try an 8 can get another four 8 opportunity tonight at 8pm
BST being British
Monday June 7, 2010
credit increased at an annual rate of 1/2 percent in April
2010. Revolving credit decreased at an annual rate of 12
percent, and nonrevolving credit increased at an annual rate
of 7 percent. "
Which means if
you've got a stock which is based on illusory consumer growth?
Might wanna rethinking our (misplaced) optimism...
Oh - it's really a
lot WORSE - damn, worse than you can imagine. Remember,
this is measuring with constantly water-down dollars. So
even with the money supply jacked up on an M1 basis, credit is
Care to guess which
way I think the market will go now?
Let me see: M1 up
6.7%, consumer borrowing up at 0.5% means, uh, something like
6.2% deflation is in the system?
No, not at
the open, but maybe later on today... What I love about
this particular Monday morning is watching how the markets have
behaved since the little nosebleed in the US markets on Friday.
the early reports hinted that the US stock futures were about
even ahead of the open, I somehow sense this may be the PPT
(Plunge Protection Team) working its magic since
down 3.84% overnight and the Hang Seng was down a shade more
also 'all down' before the open when I looked here, so even if
the futures seem even-keeled, I wouldn't bet on it being that
way for more than a few minutes.
numbers had a decidedly reddish cast to them, too.
biggest number today will be the Fed's consumer debt figures.
Drop back later on today and click on this link and then on to
the June 7th report when it's posted.
dynamics of the Consumer Debt num ber (errantly called the
Consumer Credit Report, because from the bankster's perspective,
they are extending credit but from the 'reg'lar human'
standpoint, it's a report on how many sheep have put their heads
how far into the consumer debt noose.
a time, having no debt and solid assets such as income producing
farm land and a little gold and silver made sense. Up
until the 1920's, or so. One of the functions of the Great
Depression (the first one, not this one) was to bust the solid
holdings paradigm and create debt dependence at all levels.\
best news for the market would be a marked increase in
consumer debt, since debt if the fuel, the grease, and the very
shaft horsepower of the economy. It's also one of the main
drivers of velocity of money.
simplest way to express the impact of 'velocity' is to consider
what happens if you own a single dollar at the beginning of the
year and spend it only once at the last moment on December 31st,
your money would have spent virtually a whole year at rest
which means it wasn't very useful since it didn't create money
to loan, didn't get relent and respent. it just sat there
other hand, if there were some magic mechanism where you could
sned that single dollar a billion times in a year, then that
lone dollar would fuel an amazing economic frenzy. That
lone dollar would be creating jobs, funding industrial
expansion, all kinds of holy economic outcomes.
practice, the Consumer Debt report gives the largest single key
insight into how the real economy is doing., If debt is up,
economic activity is increasing which means more
consumption, which means more jobs, which means more....you got
the picture. Inflationary in general.
other hand, if the Consumer Debt Report falls significantly,
that means less spending, fewer jobs and oh-oh: deflationary.
If you're a math
head, you can click over here to refresh on how indirect
measurement of the velocity of money works, or if you're like
me, it will be just another day until an hour before the market
A steady Consumer
Debt report shouldn't push the market too much. An
expansion of consumer debt may lead it higher, but a decline in
consumer debt would likely mean a last-hour sell-off...at least
that's my sense of it and the usual caveat burned into your
forehead is "This is not investment advice...go find a pro if
you don't have a clue what you're doing."
discussion of 'steady
futures' the other 'Big Ugly' of the day is the Bloomberg
report that the "U.S.'s
$13 Trillion Debt Poised to Overtake GDP: Chart of the Day."
The Builder Bunch
With the Eurogov in
economic crisis, one of our well-informed readers offers some
speculation as to what's going on...
"The Bilders Have Failed and Are
Now Trying To Activate Plan B
The choice: illuminati
population reduction or exponential expansion into the
Now that their plan to kill 4
billion people has been exposed, the Billionaires and
Trillionaires of the illuminati are trying the unfamiliar
game of being “nice.”
Their plan is now to offer
“gentle” population reduction and moderate increases in the
living standards of slave populations. Oh yes, and for the
American slave population, debt slavery would be slightly
more “regulated,” sometime in the future.
What a joke. These people who
have systematically murdered and enslaved hundreds of
millions and even billions of humans for centuries are now
going to try to be “nice.” They have lost all trust and
power and are lucky to even be alive.
wealth of information on this link and it would probably
be worth perusing. If you look, be sure to check the entire
Before you write
this all off as conspiracy theory, consider this little extract
this Wikipedia page:
Bilderberg founding member and,
for 30 years, a steering committee member, Denis Healey has
"To say we were striving for
a one-world government is exaggerated, but not wholly
unfair. Those of us in Bilderberg felt we couldn't go on
forever fighting one another for nothing and killing
people and rendering millions homeless. So we felt that
a single community throughout the world would be a good
In 2005 the then chairman
Étienne Davignon discussed these accusations with the BBC.
"It is unavoidable and it
doesn't matter. There will always be people who believe
in conspiracies but things happen in a much more
incoherent fashion...When people say this is a secret
government of the world I say that if we were a secret
government of the world we should be bloody ashamed of
Well, yeah, now that
you mention it...oh-oh...what's this?
Click over here (if you have the bandwidth) and check out the
Channel Three report out of Memphis on how "Mystery crop damage
threatens hundreds of acres"...
Gotta wonder if this
is some variant/rogue fungus since there's still some unfilled
linguistics from the 'fungus amongus' meme sitting out there...
Say, you don't think
this is a bio-engineered attack, do you?
Rush to War
Iran may be providing an escort for the next Gaza-bound convoy
sets up tensions for this week in the Middle East.
Wonder if this will feed into July 11th events? Time will
tell, as always...
Nothing like a good
war, though, to get public attention off the Gulf and the Euro
collapse and.....well, you get the picture. Orchestrated,
or coincidence is the only question worth debating and the
evidence is way beyond your pay grade or mine...
Wars Between the Business Models
the Austin Police Department is offering food vouchers to people
who turn in guns?
You'll know it's
really gotten bad when the government offers bloggers food for
turning off government-critical web sites...speaking of which...
You see where the
FTC is maneuvering to appoint itself lord & master of the net?
The idea is to levy
some kind of charge on sites that simply list headlines (as in
RSS reader feeds) and give this money to Olde Tyme Media -
the newspapers - which oughta line up salivating for the dole.
Expect this to generate miles of inky editorial page
support...since the money would go right back to the cabal of
rolled-up newspaper empire owners who want to feather their own
Which, of course
offers us a fine way to determine who is MSM and who is not
since the pro-human newspapers would stand for the chilling
effect of public discussion/free speech. Which is
differing from the shilling effect on the other side...
Of course this pales
Damage Control Leaks Online" which was reported by ABC News.
Seems BP is buying search redirects from Google &
Yahoo...which...well, let me ask you this: "Do you think
search engines are free, or are they just another business
Hell of a Quote
New York Magazine
has always been a fine read. But their piece this weekend,
Free at Last" is incredibly good... A taste?
evening an inmate badgered Madoff about the victims of his
$65 billion scheme, and kept at it. According to K. C.
White, a bank robber and prison artist who escorted a sick
friend that evening, Madoff stopped smiling and got angry.
“Fuck my victims,” he said, loud enough for other inmates to
hear. “I carried them for twenty years, and now I’m doing
A highly recommended
read because it starkly reveals what some of the PTB types and
minions are like.
inherently bad, until it turns into a variant of
obsessive compulsive disorder when no matter how much you
have, it's never enough.
looked at the pre-open session half a dozen times, and with my
eTrade "MarketCaster" live quotes about to light up in
30-minutes when the rest of the market goes live, I ask myself
"How much is enough?" But the deeper question is really
"What am I willing to do to get there? Am I in danger of
crossing the OCD line?"
I think I'll go
think about it...and wash my hands half a dozen times...
=== snip and save
Secret of the
When I am not
writing something for this site, doing an update for
Peoplenomics subscribers, consulting, chasing goats down, or
trying to fix a broker server around here (more on this last
part tomorrow), I like to spend a fair bit of time investigating
how the "real world" operates just beyond our collective grasp.
I do this in a particular corner of my office I call the WuJo -
a kind of special chair where I think about the intersection of
'everyday reality' and "non-ordinary reality".
Even part of the
UrbanSurvival/Peoplenomics library is devoted to the writing of
WuJo. Everything from When the Impossible Happens: Adventures in Non-Ordinary Reality
to the inner workings of martial arts ki/chi/qi energy that may
be discerned from books like
Book of Ki: Coordinating Mind and Body in Daily Life.
To be sure, there is
the practical side of my library - stuck in the harsh reality of
everyday business. In this (much larger) part of the
library are books like
Essays on the Great Depression
by Fed chair Ben Bernanke.
In this serious part
of the library, you'll also find expensive grad school books like
Business Research Methods with Student DVD (The Mcgraw-Hill/Irwin Series / Operations and Decision Sciences)
although my version was before DVD's, but the principles a
It's in the study of
major principles of Life that I spend most of my time.
All of which winds a bit circuitously around to this morning's
first topic, the experiment I mentioned last week where you
write down the number "8" (which laid over on its side is the
symbol for infinity ∞ )
with the idea that such an action has been alleged to improve a
person's financial situation and is so powerful that we pointed
to a telephone number being cancelled
(0888) 888 - 888 as evidence that we have been seeing an
'attack' on the number 8 by the PowersThatBe. The 'attack
on eights' being used by the general public isd very interesting
to watch - as the number's negative associations are all over
Take for example the headline "Eight
found guilty in Bhopal case" or "Israel
deports via Jordan eight Gaza-bound activists" and the list
To make the case, you might go to a
news engine like Google and put in the spelled out version of
other numbers and do a comparison: 'two' has
63,099 hits when I looked, while nearby 'seven' had 44,376
'Eight' had 48,890 while
'nine' had 46,390.
Six had 47,998.
I'll let you dig out your book on
statistics to figure out whether than more than one standard
deviation in that little nump on 'eight', and no dbout if
there's something to it, maybe itg's just because we're looking
for it. No telling.
But back to this morning's first
results from our Great Eight Experiment, consider the following
Placing the number 8 in my
wallet last week has definitely had a profound financial
impact on me, unfortunately the impact has not been a
positive one. Friday I received a bill from the hospital for
$1100 for my new son who was born at the end of April. I
thought that everything was straight with my insurance
company but despite them already paying the doctor and the
hospital for my wife’s maternity care, they have no idea who
that new born infant boy with the same last name as me is.
Then Saturday I received a
letter from the lawyer of the person who owns a duplex next
to a rental house that I own in another state, complaining
about a retaining wall that is in disrepair (which I don’t
dispute) as well a tree on the property line that they would
like taken down. Based on past repair estimates, this work
is probably going to cost me $6000-$8000. To pay for these
repairs I am going to have to cash in an old 401K that I
have from a job I left 8 years ago.
Are you aware of any negative
energy being associated with the number 8 because I feel
like I have touched the third rail of the Economic
Devastation Express? Needless to say, I got the message from
the Universe and removed the 8 from my wallet. Perhaps I am
meant to earn my money from slogging through rather than
disclaimer applies, we don't offer financial advice, but maybe
things would have been worse had the '8' /
∞ been in your wallet? Maybe
it takes three eights as I suggested last week because of
that phone number story.
On the other side of
out "eight(s) in the wallet" we have this amazing story from a
long-time reader who plays a little poker...enough to be listed
as a playah on some poker bio web sites:
"George, first, I put the new
paper with three figures of 8 in my pocket bank roll. Later,
as I went on my daily walk, it is not usually for me to go
into a kind of meditative dream state, I had a flash of
insight that I had actually changed my aura. It last only
for an instant but it was very strong visualization.
I made a trip to the poker room
with two friends Friday. On the way I gave them each a paper
with three figure eights on them.
I went to play in the Pot Limit
Omaha tournament. Here this gets interesting. Seats are
randomly assigned as players as they pay their entry fees. I
was assigned, now this is no shit, there is no reason to bs
you or anyone else about this, seat 8 at table 8. The first
hand I won was 8's full. As players are knocked out, tables
are consolidated. I was moved to...........seat 8. When we
got down to the final table there is a redraw for seats. I
got to stay in my seat........8.
Now here is how the universe
works, at least for me. I played all day with out making any
mistakes, then this hand came up. My hand had good potential
so I called the blind. I saw the flop. There came two threes
and a spade flush draw. I had the nut flush cards, the ace
and queen of spades. It was checked to me, I was in next to
last position to bet. In this case the right thing two do is
bet the pot just like you have the three or the nut flush
draw. I checked. First mistake. It was check all around. The
turn brought the spade. It was checked to me. I checked.
Second mistake. The river brought a nine. It is checked to
me, I check. The last player bets the pot, all fold around
to me. Now I am in trouble. I call his bet with the idea he
may be bluffing. Third and last mistake of the hand, I call.
He has made a full house on the river,and I loose about half
of my chips. I am now short stacked. I play well enough for
the rest of the tournament and finish on the bubble, one out
of the money.
The lesson from this experience.
The universe will give you ample opportunities to succeed.
You must do the right things as you are presented the
opportunities. I had two opportunities to win the pot and
perhaps win the tournament. I blew it.
Oh, and by the way, both of my
friends came home with more then they had when they left.
They covered their expenses. One made a couple of hundred
and my good friend won about a thousand.
You may tell this story any way
I'd say he told it
just fine... Which gets us around to the particularly
interesting part of WuJo study that is of interest. Here
we had one reader who was drawn to the three 'eights' approach,
while another was called to the single 8 approach.
This brings me to a
knowledge point and an action point.
The knowledge point
is that Clif has an interest semi-theory about the possibility
of directly manipulating reality by use of symbols.
Specifically via the Graphic Language Application Substrate
(GLAS) which goes to the idea that certain symbols either act
directly on how Universe resolves into what we call
'reality/here & now' or the existence & application of
these symbols somehow triggers intent at the preconscious
level which somehow resolves as 'reality/ here & now condenses
into the 'present' moment.
At the moment I am
leaning toward intent. as the key (not to be confused
with the ki/chi/qi, of course). And with intent foremost a
couple of new experiments come to mind which as I do them, I'll
pass along results.
One, however, might
be to think if you can figure out a way to arrange three eights
on a piece of paper so they form what Egpt's most famous
Enemies of the
One of the real
highlights of the weekend for me was a conversation with my
friend Howard Hill
(bio) which got around, as part of a larger
discussion about the virtues of several different call
option-writing strategies, to Howard mentioning in passing that
I (yours truly) might be considered an 'enemy of the state'
because I am so skeptical of much that's done by government.
True, I am sometimes
skeptical of government reports, but as Howard points out, I
should take pains to point out once in a while when I cite
source material who the sources work for in the PTB.
Fine point, that.
But, then I flipped the conversation around and asked Howard
about the other side of it: If I'm some kind of 'enemy of
the state' for questioning authority a little too vigorously,
might not he be considered an 'enemy of the state' because he
quite regularly 'takes down the pants of Wall Street" and
discusses how the little investor (one lacking sophistication)
is regularly screwed?
Fun thing is,
neither one of us is too sure who's more dangerous: The
non-violent, Constitution-loving skeptical writer who points out
things like the bullshit numbers first put out about the oil
spill/ocean murder, for example, or the non-violent,
Constitution-loving skeptical writer who lays out the trail of
how financial genocide has been - and is being -orchestrated
against regular folks.
Our Last Gulf
Right around the
time of the BP incident, Elaine went shopping on an important
mission. Down at the local Kroger's she found a five-pound
bag of frozen uncooked, very large shrimp on sale.
Originally, this was a $67 bag of shrimp, but it had been marked
down several times and by the time she got our Kroger's card
discount and such, this five pound bag was down to something
less than $13.
Sunday afternoon we
had a fine shrimp-feed. Accompanied with some Alaska king
crab (also picked up on sale).
Ciabatta and a few glasses of wine...well, life doesn't get
Hope you had as good
a culinary weekend. Man does not live on paper alone,
neither do women. Although I understand your confusion.
(That's my feeble
Monday attempt at humor, deal
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.