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Friday November 26, 2010    07:55 AM CST   
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Red Friday

Oh sure, lots of financial/econ sites will be talking about Black Friday today for retailers, but around here our focus is on all the red ink that was flowing around markets overnight. China's Hang Seng was down more than 3/4th's of one percent, Japan was down 4-10th's of a percent and Jakarta was down 1.6%...so a fair bit of red in Asia.

 

But the real train wreck of the day is Europe where in the early going, the UK was down almost 1.6%, France was down more than 1 3/4% and even those thrifty Germans were down  1.3 percent.
 

So, as I got my eyes to focusing on the bleeding markets, I also noted that gold was down more than $16 earlier and that could mean that the markets are about to take a real header over the next week, or two, here in the US.  Down 100 today seems possible.

 

One reason is the strengthening of the US dollar...whose demise has been vastly overplayed.  Yes, the USA has a fair bit of debt, but consider the local conclusions about where to invest money should Europe's Euro implode...where would you put money now if you wanted as much back in 5-years, or so?  That's the topic for Peoplenomics readers this weekend.

 

Long term readers will recall our investing in a gold coin back in 2001 at $275, or so per ounce.  Then it was silver at $7 in 2005.  What's next?  Well, we're trying to spot something that will do at least as well...

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The New York Stock Exchange will be closing at 1 PM today, three hours earlier than normal, so this could be a very short, stomach-churning day.

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Did you happen to notice the BIGGEST financial story in a long time over the holiday?  No, not that talk about the 'insider trading' investigation.  Nice, but that's not going to be fundamentally disruptive to the markets and the way people make money.

 

No, instead, I'd direct your attention to the Business News Network report that both France and the UK are talking about slowing down the frantic pace of high-frequency trading.

 

In order to understand why this is such a game-changer, you have to understand a bit about how such systems work:  Easiest way I can think of is by just imagine that there's a computer between you and those (supposedly, LOL) transparent markets.  Whenever you place an order, say to sell 1000 shares of XYZ corp at a limit of $16.25, along comes from the high frequency trading software which then (in effect) sells your stock to someone else at $16.26 and you only get $16.25 for it.

 

Where does the other penny go  (more usually fraction thereof) ?  Into the pockets of the high speed trading computer that is front running your trade. 

 

On the buy side, it works the opposite.  You put out an order to buy 100 shares of XYZ company for a limit price of $17.10 and what does the high speed trading platform between you and the exchange do?  It runs buys the stock for something like $17.09 and change and fills your order at $17.10.  And again, the penny, or two, or fraction, goes into the pocket of the high frequency traders.

 

Now, in practice, it's not a penny a share.  Just a fraction is all that's needed to really make a killing because such systems can print money either way - market going up, or market going down.  Slick, huh?

 

And why would such talk scare the markets?  Well, if you had a deal going where you could make millions of dollars each and every day, regardless of the direction of the market, wouldn't you be a little worried?

 

Not sure if my online broker disclosures make it clear that there's (likely) an HFT system between me and the market, but I can already hear the industry reaction:  "Hey, you're getting the price you set, dude..."  Maybe, but seems to me that unless there's disclosure to the effect that the House is making dough on the 'action' either way, that something about 'transparency' just doesn't feel, oh, honest, you know what I mean?

 

Crashing Markets

Meantime, there are reports from Bloomberg that rates have been going as high as 7.52 percent to hold ten-year PIIGS papers in Europe.

 

All of which would make for a very interesting long-term trade, since don't tell anyone this, but what would happen to this kind of debt should the underlying currency, the Euro happen to implode in this period?

 

Ultra-Rich Beggar the World, II

Don't know as you've noticed, but the whole 'concentration of power' in the hands of the ultra-rich is going along just splendidly.  Just, for example, despite all the 'shock and awe' of it all, part of Ireland's 'austerity measures' includes a reduction in the minimum wage.  In fact, Ireland is cutting the minimum wage by a whole one Euro per hour which is just plain crazy.

 

Why if someone said to me "George, as the People's Economist, what would you do to make sure the concentration of power continues to accrete into the hands of the ultra-rich?"  My answer would be:  Cut wages and ensure that anyone remaining who has even a ghost's chance in hell of asserting their freedoms as human's, be brought under the economic boot.  I'd be hard-pressed to out-do the EU Cabal.  Not only does it drive people right back into the debt indenture, but to the extent that bad times can be made semi-permanent, the ultra-rich will ensure their continued enjoyment of a huge concentration of wealth.

 

U-R Beggar the World, III

Oh, and Hungary has become the latest country to force people to move their pension funds into State funds...

 

What's going on in slow-motion here in the shadow governments of the world have decided to hijack high finance.  So, as a result, lo9ok for markets to bring on a Greater Depression to bring governments back to heal.

 

Classic up/down power struggle.  Out of the public light, but very real.

 

Next Distraction

OK, so when it looks like too many people might be ready to wake up, how do you silence dissent?  Crank up something like a new war...yeah that's it.

 

How about "NKorea warns region in on brink of war" for a start?

 

China:  US "Spam Tickets"

China's People's Daily has an interesting piece in their Chinese online editions today.  The whole article may be found here, but the piece that is really important is that in his interview with the Bank of China Monetary Policy Committee Xia, reporter Tian Li gives us China's three-point plan to improve the global economy:  Reduce the US military spending levels was the first suggestion.  But the second one was that the US ought to sell gold to shore up its finances:

"Second, the United States has more than 8,000 tons of gold reserves, the recovery of the economy to raise more funds, not to expand the U.S. budget deficit, could sell a little gold? "

The Chinese would also like to see the US lift restrictions on exports of high tech equipment, although they think that US goal of doubling exports is five years isn't realistic.

 

And, about why there's a global crisis in the first place?

'Why the outbreak of the crisis?  Because the U.S. government in this century, this round of economic globalization has not fully prepared. 2000 The Nasdaq bubble burst in 2000, the long-term implementation of low interest rate policy to stimulate a huge bubble, and finally a crisis, the U.S. government's wrong policies were causing a world crisis.'

The Google translation isn't perfect, but what comes across is a strong message from the Chinese that the US 'owns' the global crisis and they're not pleased about it.

 

Stuxnet for Sale?

Report on Debka this morning that a Sky TV report is that Stuxnet is for sale, from the ands of private developers, and that it could be obtained by terrorists.

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Question is still on the table: Who is behind Stuxnet and could it be turned into the ultimate terror weapon?

 

Oh...and wouldn't that give the government reason to seize the internet and install a licensing system for all users and content providers? 

 

All highly reminiscent of how the FCC seized control over what had previously been a radio free-for-all prior to the last Depression.  Must be a common trait of them:  Except the highly disruptive technologies before were the advent or radio and gasoline-powered car.  Our modern analogs are likely to be networked computers and genetic engineering/GMO/pharma...

 

Troubled Favela

The police in Rio are claiming to have recaptured a shanty town that was in uprising.  The majority of the fighting has been between drug lords, tgheir minions, and local police.

 

As an aware reader noted "GlobalRev count increasing daily."  Sadly true.

 

On Candid Houston

Our friends a couple of hundred miles south are about to be caught on camera as Houston installs somewhere between 250 and 300 surveillance cameras, which we must assume is just keeping up with the evolving police state mentality in New World America.

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I keep coming back to the idea of copyrighting myself, so I could send anyone taking my picture, likeness, fingerprints, and so forth, a royalty.  But, of course, that'll never go anywhere.  The presumption is that if you're 'in public' then whatever you do is for public consumption.

 

 

(continues below ad)

 

Coping: Mr. Ure's New Quack Diet (NQD)

What seems to be the #1 discussion the day after Turkey Day? Well, if you leave out the fact that this is Thingsgetting Day and Monday will be Cyber Monday when the online retailers report how well they have managed to shear what little money the sheeple have left from their possession, probably dieting is in there somewhere.

 

Behind every diet, there's a theory = and my friend Clif made an interesting observation, suggesting that getting rid of a few pounds might be as simple as working on a biofilm approach.

 

This may sound a little grody the morning after a food-fest, but the idea he tossed out was that people with extra poundage issues may be eating more than they should because it's possible to have a biofilm develop internally (stomach and intestines),. which in turn could keep a body from absorbing needed nutrients, which in turn could lead to cravings for guess what?  More food.

 

Sure enough, a quick look-see at the web suggested that indeed, not only may biofilms be a health issue, but there's a fair bit about how they work on the Centers for Disease Control website, like this one:  "Fungal Biofilms and Drug Resistance" which might be worth your time.

 

OK, so biofilms is an interesting concept.  Turns out there's a fair amount of research into what can break down biofilms including an extract of garlic called allicin.

 

A little more study, and I got to thinking "Gee, IF I happened to have a biofilm going on at some low level, might it have something to do with my eczema and asthma?"

 

Lots of additional research seemed like it needed to be done, BUT I decided to pick up from stabilized allicin, and some delayed release probiotics and give it a try.  Other than a short bout of garlic breath (not the first time, huh?) I figured there wasn't anything to lose, so I'll be starting my regimen later on today.

 

Also doing a lot more reading on biofilms and how they may be associated with a lot of common diseases - everything from Autism to Lyme's disease to coating intestines to the point where their ability to absorb antibiotics is weakened.

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NONE OF THIS IS HEALTHCARE ADVICE.  TALK TO YOUR DOCTOR OR HEALTHCARE PROVIDER BEFORE STARTING ANY COURSE OF TREATMENT OR MAJOR NUTRITIONAL CHANGE.

 

I'm not offering to sell you anything - I'll leave that for other sites.  But what I will do is keep you posted as things go along.  Should be an interesting approach to dieting.  And, who knows:  If it works, we may have to call it the New Quack Diet, lol.

 

Meantime, you don't want to stand too close.  The allicin is an extract of garlic and I'm smelling a bit like a pizzeria.   One that does a turkey topped pizza...

 

Things You May Have Missed

MIT's Technology Review has an interesting piece on "How Terahertz Waves Tear Apart DNA".

 

It was posted before the outburst over airport scanners which operate, if I've got it right, under one terahertz...

 

Best Deals

Good story from Yahoo Finance about their "Black Friday Guide to the Best Deals and Steals."

 

My recommendation is don't buy anything.  Most everything oughta be cheaper in January... Can I wait 30-odd days for something?  It's taken 60-years to develop, but I think I can manage that now...  maybe....

 

 

Send your comments to  george@ure.net  

 

Last week's report is always here

 

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Thursday November 25, 2010 

Happy T-Day

Today's report is over at the www.peoplenomics.com site.

We'll be offending sensible electrons from this location again tomorrow.

 

Special Update

Dollar Axed

There's a report on the China Daily website (and on the Chinese English-language satellite news services) that could have horrific impacts on the West - that is - once the meaning of it sinks in.  Both Russia and China have decided to back out of US dollars as the basis for their international trade.

 

What had commonly happened in the past, was that countries which do business with one another would agree on the underlying currency of a deal.  And, since up until recently, the US dollar had enjoyed the state of 'global reserve currency' the underlying values were stated in US bucks.

 

Now, however, that dollar hegemony is quickly disappearing.  With the Euro potentially headed for the rocks, there's a good question about whether the Russians and Chinese may be cooking up something like a global currency basket to usurp the Dollar.  Time will tell, but over the longer term, despite the muchly hyped tick up in the employment picture this morning (which I figure could be seasonal hires as much as anything) there's a big cloud that just popped up over dollar denominated assets.

 

Bounce Wednesday?

So what if the market dropped 142 points on Tuesday and took away up one percent of your life savings, if you’re still in the market with your 401(k) and so on?  It doesn’t matter, because I’m thinking we have a lot more downside to come over the next few months. Meantime, what's a 61% bounce off 142?  87 points up, maybe?

 

We begin this morning’s trek through the financial bramble patch by noticing that Dublin is about to take control of the Bank of Ireland.  This sets up continued weakness in the Euro, and as the Euro falls, the US Dollar seems likely to bounce.  And, while this site doesn’t make investment recommendations, seems to me that a stronger dollar could be a nightmare for the Dow, which has been enjoying the inflation-adjusting implications of a lower-valued dollar to pump up its levels.

 

Once that turns around - which is what a strong dollar rally would do - then we could easily see the Dow back under 10,000, the price of gold dropping back maybe even under $1,000, and everyone watching in horror as the EU breaks up.

 

Not that I’m the lone voice in the wilderness on this.  Recall that former Fed boss Paul Volker is quoted in that direction back in May of this year over at the Naked Capitalism site.

 

And even Volker’s thinking wasn’t presactly original.  The New Scotsman (as opposed to us old ones) wrote in 2005 that the CIA gives grim warning on European prospects.”

 

I don’t claim to be a rocket surgeon, but seems to me “If you can’t trust the CIA, who can you trust?”

 

Korea Getting Exercised

There’s talking floating around Washington, picked up by ABC News, among others, that the US and South Korea may hold some joint military exercises in coming weeks. 

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Not that this would likely scare North Korea any, since seems to me that NK can’t so much as go to the john without checking with Beijing first.  Still, the larger game here could be something like:  NK starts a distraction and draws the US up to the 38th parallel, and then that would give China the chance to reclaim with little military resistance4 the contested Senkaku Islands area. 

 

True, the Chinese have pulled their ships out of the Senkaku region- for now.  And yes, they have restarted shipments of strategic metals to Japan.

 

However, if China has a larger plan in mind, how else would you sucker the West into focusing on a different objective? Think sucker-punch here.

 

Mine Disasters

There’s sad news out of new Zealand today where 29 miners, trapped in a coal mine have been declared dead after a second explosion in the mine.

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There’s another level of this story to be thinking about - beyond the immediate loss of life.  Remember the mining accident recently in Chile?  All this seems to me to indicate the possibly there’s a whole bunch of earth movement going on.

 

IF that were the case, we’d expect to see a big increase in other earth-movement kinds of stories, too.  Like, oh, train derailments, for example. 

 

“Oh, you mean like the derailment at Wauseon Ohio that caused evacuations and the one down in Burke County, Georgia this past weekend?”

 

Uh…something like that.

 

East Coast Media Bias

Some that bugged me for years when I was a news director in Seattle radio:  Always seemed like there was some kind of a bias against stories that developed in the Pacific Northwest.  The weather the Seattle area the past couple of days has been horrific.  Cars abandoned, using planes to fly over the freeway to spot stranded snow victims, and so forth.

 

But something almost magical happens when a  biggest in years storm like this one crosses the Continental Divide.  It becomes news.

 

So, if you want to know about Midwest news BEFORE the fact when you can do something about it, bookmark a couple of Seattle TV stations like KOMO, KING, or KIRO.

 

Yes, there really is a Pacific Northwest, although more often than not, it’s still treated by the East Coast media establishment (emphasis on stabbing)  as though the US side lost The Pig War of 1859 and the whole region was lost to the Brits...it really is part of America…

 

Coping:  The Bad, The Good, and the TSA

You may remember earlier this week when a reader, discussing the TSA intrusive searches at airports for people who opt out of full body scanning, made the remark that if this kind of thing isn’t stopped at the airports, the next thing you know it will start happening at bus stations and railroad stations.

 

Sure enough, what do we find this morning but DHS secretary Janet Napolitano saying in an interview with Charlie Rose last night, that’s just what they have in mind.

 

And, as we survey the continuing outcry over this, we see libertarian republican Ron Paul suggesting that the way to deal with this may be to opt out of flying.

 

And as if all of this is not disturbing enough, there’s a report from Douglas Hagmann’s Northeast Intelligence Network that TSA is now making a list of ‘alternative media’ and making a list of which reporters and news outlets are whether the TSA’s searches.

 

A report earlier this week also suggested that TSA may have a hand in spreading (pardon the pun, there) illness if gloves aren’t changed between each passenger.

 

On the OTHER side of the equation, though, there are continuing worries about domestic terrorism, which deserve some discussion.  For example, the California man who’s being charged with having a ‘home bomb factory’ and is being held on a shopping list of federal charges.

 

Then there were nine terror suspects busted in Europe overnight, both of which go to the case that yes - there really are people and groups out there that mean America harm.

 

To be sure, all this bring up a wide range of Constitutional issues, but here the courts recently have been troubling.  For example, an Appeals court has just ruled that use of a GPS tracking device on a vehicle when someone is a drug case suspect violates their Fourth Amendment rights.

 

There are a fair number of cases coming in January which could tip the Supreme Court’s hand, but my guess would be they’ll come down on the side of the corporate agenda, since all are political appointees, but I’m willing to be happily surprised.

 

A friend of mine called Tuesday morning to wax on about how in his view, the whole flap over flying was much to-do about nothing.  “What about the radiation risk of people flying over 30,000 feet where there’s a much higher level of radiation present?” he wondered.  Sure enough, there’s more radiation up there, the higher you go and a lot of research on point.

 

Another reader offered a pointer to a regional flying outfit that operates out of closer in facilities than the majors of the airline world.  Called SeaPort Airlines, the company which serve a small part of the Midwest and a piece of the Pacific Northwest,, is based on flying high performance turboprop equipment under different rules than major airlines.  The idea seems to be that regular people can enjoy the same kind of ‘show and go’ flying that private aviation and the corporate upscale enjoy. 

 

What’s more, the idea of showing up just 15 minutes before a flight, walking on, and having valet parking, or parking very close at hand, sure seems like a dandy way to go.  As the company website explains: No TSA hassles at any of our locations.  Affordable fares…” and you can read more here.

 

I’ve always been a believer in reaching reasonable solutions and SeaPort using the same kind of equipment and locations as enjoyed by the corporate upper crust, makes me mighty pleased.  Might increase the demand for pilots (smaller planes, but more of them) while at the same time increasing the convenience of flying.

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Work-arounds, or not, the Hagmann report mentioning “alternative media” is sure a sobering distinction.  Yes, that’s right, the Constitution and related rights documents don’t differentiate between a free press owned by corporate interests selling ads and pocketing the profits for shareholders and the little one or two person electronic newspaper which is labeled “alternative”.

 

Fact is, I view the “major” media with just as much suspicion (if not a little more) than I do the smaller web-based operations.  And just how much “training” should it take to be considered ‘real media’ as opposed to alternative?  Judging by Hagmann’s report, DHS is entertaining the notion that anyone who questions government authority ought to be considered a potential domestic extremist.

Against this background, what’s interesting to me is how this is becoming a grand historical rhyme.  Remember the Johnson/Nixonian/FBI surveillance of antiwar protest groups when the Vietnam War was going on?  COINTELPRO is something worth reading up on. Seems government’s response to a new generation of people questioning the paradigm is trying to play out along a similar line.

 

The more things change, the more they stay the same.  No doubt, since we’ve covered the existence of National Opt Out Day, we’re bound to be on a DHS/TSA ‘enemies list’ somewhere.  Just one request for fairness, though:  If we’re on such a list, be sure to add outfits like the Washington Post and the Associated Press to the list, too.  These dangerous alternative media are also covering the story.

 

Server Upgrades

If this morning seems a bit shorter than normal, you're right!  One of my servers here is down for updating and by the time checkdisk runs on a couple of terabytes, it'll be past breakfast time and overdue for the morning update.  So on one of the backup servers.

 

As a result, the www.Independencejournal.com  site, blog post, and the RSS and MOBI feeds may be slightly delayed, today.

 

Tomorrow's report, since it's a holiday will be for Peoplenomics.com subscribers only.  Back for our usual romp chasing elusive dollars through the news on Friday morning; the free side here is posted roughly in line with when the US bond and stock markets are open, depending on my whim, and which way the wind is blowing.

 

Tomorrow's Peoplenomics report will be nearly as cynical as any other morning around here, but again somewhat abbreviated, since I have to get the (other?) turkey ready for Thanksgiving.

 

If we don't chat in the meantime, have a great holiday. And remember, post diner naps should be timed at 1-minute per pound....

 

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Tuesday November 23, 2010

North Korea's Dangerous Gambit

The big ponder of the morning is "What goes nuclear first?  NK/SK or Europe's finances?  Let me explain why it's worth asking...(feeling like a tipping point yet?)

 

Readers of Peoplenomics may recall that one of my 'nightmare scenarios' of the just -past 'tipping point' would be an escalation of hostilities along the North-South Korea border, including a possible strike into South Korea due the Gee20.  I was wrong.  So were the Brits - they worried about it, too, before the Gee20.

 

Turns out that my read of things was a couple of weeks early and this morning with have  (roughly in order) North Korea firing artillery into a South Korean island which has killed two, the South Koreans, in turn have lobbed a few shells back up north, to which NK says its attack(s) will be 'merciless',  and SK says it didn't really ask for US tactical nukes, but....

 

All of which is curiously (or not) timed, since just last weekend in our premium content (Peoplenomics) I was explaining that the world is in a difficult situation, having reached about as far as finance could take things and in a situation where although some of the functions of war have been achieved via globalism, the killing of people and destruction of manufacturing that accompanies war has been missing.

 

Seems that current events are starting to edge toward the "let's fix the economy through wider war" camp.

 

War is not an immediately bad thing for the stock market.  If you look at what happened when the Japanese attacked the US in December of 1941, you'll see the Dow only dropped about 5.9 percent and that took several trading days.

 

Might be an interesting short to play with this war going hot again; the Seoul KOPSI index was only down 0.79 percent overnight.  Remember the day after Pearl Harbor, the Dow was only down 2.9%, so figuring NK keeps up the pressure, that'd be an interersting short side play, although as usual, this is NOT INVESTMENT ADVICE.

 

Notice how China is acting too; telling its citizens not to hoard coal and oil.  Ostensibly, this is to cool prices, but in a little larger view, this could be viewed as 'getting ready for a war'.

 

Oh, and remember that purported ICBM launch from off Catalina island a few weeks ago which was immediately dissed as a 'contrail'  (not!)?  Sure looking more and more like that was China telling the US in no uncertain terms that it wanted something done - likely: no more POMO action by the Fed. 

 

Now, since the US Fed has kept buying our own treasuries, thus watering down the Dollar, the Chinese, which hold billions worth, COULD be viewed as ramping up to send an even stronger message to the US via a growing border skirmish with South Korea by way of their NK proxy.

 

Speculation is that NK would hav e needed outside help to build their new enrichment plant, and their buddies in China are a logical suspect, but then again, we have to wonder which countries in Europe have business dealing under (unter der tisch) mitt....I mean with the Axis of Evils?

 

Hong Kong's Hang Seng Index was down more than 2½ percent overnight.  Seems markets are a little jittery about the outlook, too.  Even before tossing in the pending break-up of the European Union.

 

Euro Twits

Say, he's a dandy Twitter note that crossed overnight, speaking of the European implosion:

"Spanish 3-month bill auction fail - debt agency sells €3.26bn vs €4-5bn indicated, at avg yield of 1.743% vs 0.951% prior"

The accompanying reader note recalls my 'bear on the boat' days, when my writings were posted while living on our sailboat, which I did for 10-odd years:

George - I sometimes think people don't properly appreciate your "bear on the boat" tome emanating from land-locked Texas. By their nature, sailors keep a weather eye, watch for change in the wind, try to anticipate the shift. Those who sail offshore (especially in uncharted waters) develop contingency plans to contingency plans - suss out the what ifs - prepare for worst and hope for fair winds and waves on aft quarter. A storm approaches ... look lively ... batten down the hatches Mister.

 

flash-points abound: banks-mortgages-unemployment / recovery summer that wasn't / QE(bust)2 / Greece-Ireland-Portugal-Spain (the 800E gorilla in the room) / AQ - ROK - Iran / solar / geo ... all while we fixate on TSA, lame-ducks and talk turkey, Black Friday sales (ironic that Friday, a short day on NYSE would be named that, hey?)

Just so. 

 

Now back to the morning's first question:  Which is likely to implode first: Europe's financial game with the Euro, or North Korea lobbing centrifuge leftovers toward Seoul?

 

The logical follow-up question is, of course, feeling like a tipping point yet?  It's bound to get even better in days and weeks ahead...well into January. 

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If you live in South Korea, or are there visiting, might want to keep the sun glasses handy.  And if you're a currency trader, remember the 'George scenario' where the US dollar rockets, dumps gold down by a third, drops the Dow back to the 7,000 (or lower) range? 

 

Oh!  And if you were planning to buy a major appliance made in South Korea, might want to pick it up before Christmas, just in case.

 

GDP

Newest data from the Bureau of Economic Analysis:

"Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the third quarter of 2010, (that is, from the second quarter to the third quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.7 percent.

 

The GDP estimates released today are based on more complete source data than were available for the advance estimate issued last month. In the advance estimate, the increase in real GDP was 2.0 percent (see "Revisions" on page 3).

 

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, nonresidential fixed investment, exports, and federal government spending that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

 

The acceleration in real GDP in the third quarter primarily reflected a sharp deceleration in imports and accelerations in private inventory investment and in PCE that were partly offset by a downturn in residential fixed investment and decelerations in nonresidential fixed investment and in exports.

I know - the kind of data that makes me reach for the NoDoz, too.  Point is the futures such and down a hundred within minutes of the opening seems to be baked in the cake.

 

Still Playing

Much like a movie with a poor plot, the TSA fumbling of pat-downs has just gotten worse, with a report on The Daily Caller reportedly from the fellow who shot the video of the child strip-search (yesterday's column, below).  This makes it sound like TSA will soon be making it illegal to video searches!

 

Readers are largely aghast at the pat-downs, with emails like this one being typical:

"Hey George,

After seeing the young boy stripped searched at an AP by the TSA pedophiles, I had to write this note to you before I finished your Monday, November 22nd column in Urban Survival. Even though I am well aware of the global strategy of TBTB wanting the "people" to get angry and react violently, I have reached the point where I am completely disgusted with the frigging cattle who just stand buy obediently and participate in this bullshit. I don't care if you are traveling to an important meeting in Peduka, or just jetting for convenience,

EVERYONE who was in that line and saw that should have ripped up their tickets and and left. At the very least, they should have left and mailed in their tickets to the CEO of the airline with a note saying this is enough. I suppose there were many in NAZI Germany who said the same thing when they saw the Jews obediently lining up to be haled away.

So far, though, nothing tops the report over on Red State about US soldiers coming back from Sandstan with rifles and pistols having a pair of nail clippers confiscated - I'm not clever enough to make this up, although not telling if it's right-wing exaggeration or not...

 

Across the aisle, the WH is claiming that 'terrorists' (the ones off Wall St.) have discussed the use of prosthetics to conceal explosives.  We're left to wonder if they discussed use of body cavities, although who knows?  That may be in the pipeline...er...so to speak....

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Tomorrow is "National Opt Out Day" but with turkey dinners with family and friends waiting, seems poorly timed from a marketing standpoint.  Americans are known for 'doing the right thing' when there's not food, or money, involved.

 

Reader Recommended:  Gizmodo's post of the Forkparty graphic on how we got to this state of affairs...slowly....and over time.

 

Airport security:  It's going just fine.

 

Dwarf Greeks?

I just had to mention the Bloomberg headline that the "Rescue of Ireland would Dwarf Greece's Bailout on Cost of Shoring Up Banks".  Since we're talking dwarves here, I'll keep my remarks short...

 

Money Madness

Everywhere I look lately, I spy evidence that money causes deranged thinking.  CNBC reported Monday that the biggest 35 banks in America will come up $100 to $150 billion short of equity capital after Basel III takes effect.

 

The Royal Distraction

Prince what's his name and what's her name are getting married in April.  Not that we care, since the whole fascination with royals is designed to reinforce the notion that not all people are created equally, divine right of kings, and all that silliness.  People who believe they are subjects not citizens deserve what they get, I 'spose. 

 

Just look at the TSA flap for evidence of the American disdain for being subjected to anything.

 

Next, subject?

 

Deworming Medicine

More useful, or relevant anyway,  is the BBC story that "Cannabis fed to ducks by French farmer for 'deworming'" cost this dude a €500 fine.

 

Baked duck, anyone?

 

 

Coping:  Breakfast of Champions, II

You want a million-dollar product idea?  Figure out exactly what it is about spaghetti sauce sitting in a refrigerator for two days that makes it taste so good.  Bottle it up, assuming it's not poisonous, and sell it to folks like me who would use it in beef stews and spaghettis till the cows come home.

 

"And how did we get off on this tangent?" you're wondering...

 

Well, I happened to wander through the kitchen this morning and remembered that we had some leftovers and the idea of spaghetti and a big glass of milk...well...just doesn't get much better than that once in a while.

 

Normally out here at the ranch, breakfast is the big meal of the day, yesterday's being typical: A couple of pieces of toast from my most recently baked loaves, a couple of eggs, fried Yukon Gold 'taters with a few onionsd tossed in to keep things lively, a nice slice of ham, an assortment of vitamins, 8 oz of milk, as a tablespoon of semi-sweet chocolate (the only sweets of the day) and that's it.  Kept me going until bedtime last night.

 

This morning, though, the spaghetti was calling to me and as I sat down to munch my way through it, I noticed that the first of the Christmas catalogs had arrived; the one from Lindsay's Technical Books.

 

One of the items to catch my eye (which may be added to my ever-growing collection of such arcane books) is "Railroad Shop Practice methods and Tools."

 

Two reasons this comes to mind as one of those "gotta buy it for Christmas" goodies.  Elaine (and her brother) were raised up around Winslow Arizona where they grandfather worked at the old Union Pacific shops and did things like rebuild steam engines.  So a family angle to having such important materials on hand.

 

The other reason? I keep thinking I should surprise Elaine with a trip on the Texas State Railroad's Polar Express run this weekend and a book on train repairs would provide a lot of technical insight into steam engine operations.

---

All of which may sound a bit drifty in terms of "Where's this going?" but I think it all comes back to this time of the year being when regardless of age, there's something about leftovers and Christmas catalogs that's a special kind of seasonal thing.

 

Oh, sure, North Korea can go trying to start a war, and yep, some Feds will no doubt root out a few of the crooks down on Wall Street - a reminder to the rest to be more clever about their shady doings - and so the Dow drops through 11,000 today.  What of it?

 

For me, the best 3-minutes of the day happened shortly after 7 AM as I recalled a snowy November up north, reading the Sears Children's catalog about model trains (over and over) while half-watching the snow come down outside.

 

No snow, a different interest in catalogs....Doesn't seem like it was 50-odd years ago,  maybe it's because some things never change:  The delight of a catalog, delicious leftovers, and up in Seattle this morning (looking at some of the freeway cameras near my old Kirkland stomping grounds - or even north from Beacon Hill), the snow still shows up right on schedule to make new memories for the next generation.

 

Not quite the 'season to be jolly' but a fine time to reminder and dream.

 

 

---

Monday November 22, 2010

Bye-Bye Growth!

Likely THE biggest story this week will be the release tomorrow of the Fed's November FOMC notes.  Reason for this is that the whole world is watching to see if the Fed will be able to stay 'in-channel' on the size of its bond purchasing scheme. 

 

What's expected is that the rate of growth (recovery if you're an optimist) will be scaled back, and that could easily give credibility to the 'second dip' scenario, which leads to much public gnashing of teeth since there is (as I pointed out last week) a large disconnect between the Fed which even critics will have to admit has managed the mess well so far - and the failed congress which should have had extended unemployment benefits in place for the Tier 1-4 losers who will exit the roles later this month with no appreciable improvement in the job market.

 

Based on early gold & silver, a small pop up at the open would be a good guess - a kind of Monday tradition, since Asia was mixed last night and there were earlier half-percent range gains in EU land which would translate to the 50-60 point area for the Dow. Except they didn't hold and the FTSE was dragged down by bank jitters...

 

Part of what's driving the EU is Ireland being backed into the "Here, take the damn money" corner.  Who ever thought we'd live to see the day when a government being bailed out by a central bank would be good for the global economy?  It's why I keep ViceGrips at the ready; the better to pinch myself in this alternate financial economic reality.

 

A reader sent in this after reading a blood pressure raising note at Seeking Alpha...

Bailout = raise taxes To quote a poster in this: "Taxpayers of the world bailing out banks, failed companies, and politicians; who then turn around and raise taxes, reduce already taxed and promised entitlements, and "nationalize" the banks whose CEO's get millions in bonuses as if they ran a successful private bank. Does this make anyone else furious? "

Statins, think satins and exercise.

---

Back to point, tomorrow morning, GDP will be out and the guess is that it's running about where inflation is 2.3-2.6% annualized, so on a constant dollar basis that means....oh....zero growth. 

 

If you're asking "How are we all supposed to get wealthy with no growth?  Tune in to Peoplenomics next weekend, when we take on that thorny issue.

 

Meantime, on Wednesday morning there's a flurry of data coming including personal income, but most people figure their own is what matters, rather than some government average which include a largely mythical 'savings rate'.  There's also a durable goods report, but again, with so much US manufacturing gone to Asia (which Fearless Leader was still promoting jobjacking as recently as his Asia travels) it doesn't matter to the remaining (roughly) 9.561-million Americans who make durable goods.  If your calculator is fired up, it's OK to be amazed that three percent of the population can make enough durables (helped by imports, of course) for the rest of us.

 

Come to think of it, long as its a lazy holiday week Monday, most people don't realize that roughly 8.8-million people are in 'financial services' - almost as many of durable goods workers.  Go figure.

 

Since the market is open on Friday (and that's when Consumer Confidence will be released) back in the old days when I bought my first non simple stock (bunch of units of a convertible subordinated debenture with warrants, since you asked) the day after T-Day was laughingly dubbed "National call your broker day."

 

Since Silicon Sally is handling the phones at my online brokerage, I'm planning to spend at least 15-minutes simply navigating all the menu choices, since brokers who have time to tell a golf story, or two, are hard to find any more.  No, make that impossible at our income levels.   

"Press six for funnier writing..."

 

A "Good" Economic Story

Latest charge-off rates for credit cards, consumer loans, real estate and so forth has shown a major improvement in Q3 according to new figures out from the Fed which aren't getting much play.

 

On a seasonally adjusted basis, credit card write-offs which ran 10.( in Q2 dropped to 8.49 percent in Q3, which is great news --- if you're a bankster.

 

As We Go Tipping

No shortage of public outrage about TSA search procedures, such as this one of a young boy which has now passed 651,800 YouTube views:

 

 

 

And the lines?  This is just plane (sorry) ridiculous:

 

 

 

And the nightmare continues with headlines from places like MSNBC about how a "TSA pat-down leaves traveler covered in urine..."

 

The one near-certainty of all this:  Travel over the long T-Day weekend is gonna be a mess.  But like one reader offered, "If TSA's intrusiveness isn't halted now, next thing you know there'll be scanners and pat-downs in railroad and bus stations and who knows where else?"

 

Stories like the AP story on Yahoo "TSA has met the enemy - and they are us" includes this tipping point reference:

"It's almost as if it's a tipping point," Freeman said. "What we've heard from travelers time and again is that there must be a better way."

As one reader notes, the S510 (food grab bill), the large number of volcanoes and strange quakes, banking mess and all the rest, really makes the TSA story look like an emotion-redirecting cover-up of larger corpgov issues in play - like the food control law and such.

 

Can't Trust NK

Not sure how diplomats can be so silly as to trust North Korea, but given they were - and turns out NK has a new nuclear enrichment program going (duh!) - the dicklomats are getting all worked up.

 

Of course this leads to South Korea asking the US for tactical nukes and all kinds of issues will emerge there, starting with this makes China feel squirmy.

 

Fencing Lesson #2

The headline reporting that "Israel Begins Work on Egypt Border Barrier" should, as we see it, serve to remind people in Washington that when there's no narco-money pouring in, it's really possible to build a fence...this is the second time Israel has demonstrated this.  Still, the concept of secure borders seems to elude inhabitants in the District of Confusion.

 

Iranian Missile Sales

Big news in Israel is about the new Syrian/Hezbollah surface to air missiles that Iran is peddling.

---

Reality Check:  Of course the global reality is that the USA is the world's #1 arms dealer (see Lord of War?) followed by Russia and Germany.  Israel is #10 in the world.

 

Iran doesn't even rank in the top 15. 

 

Speaking of disarming facts: I didn't notice any public uproar about the US sale of $60-billion arms sale to the Saudi's by Fearless Leader, who holds a what kinda prize was that, again?  I must be missiling (sic) something...

 

Cayman Islands GM 'Skeeters

Say, here's a game-changer for you:  There's been a deliberate release of genetically modified mosquitoes in the Cayman Islands which escaped our notice earlier this month.

 

This is under the guise of disease control, but what happens when natural 'in the wild' beasties start eating genetically refried skeeters? 

 

I used to think offshore tax haven secrecy was a good thing, but now, not so sure if this is the 'new' offshore secrecy plan - GM test grounds... 

 

The theory is that the mosquito testing at semi-isolated Grand Cayman should be safe, but that assumes none of the scrambled skeeters gets into a jet passenger cabin (more than a half dozen schedule flights per day leave Owen Roberts Airport in George Town daily...)  And that doesn't count local interisland service to Cayman Brac and Little Cayman...or those corporate jets coming down to 'do banking'...

 

Say, here's some fitting music for this:  (here)

 

Shoot the Children

.....because now one shot will cover six diseases in the Unemployed Kingdom.  Wonder what else in in the shot, hmmmm?

 

Think that would make a helluva fine office sign for a group practice of pediatricians.  Which may explain none are clients of my marketing consulting services.  "We shoot children" would be an attention-getter, though... has a nice W.C. Field's kind of ring to it. 

 

"Children should neither be seen or heard from - ever again."

 

(It's OK, I love kids.  Especially since ours are grown...)

 

Coping:  Turkey Time

Mondays like this one I have a Dickens of a time getting excited about much of anything except for Tuesday's run to the store to pick out 'the bird' for Thanksgiving. 

 

Call me a tryptophan junkie, if you will, but nothing is better than a turkey, hot from the oven, with nice gooey dressing, tons of gravy, mashed potatoes and - room permitting - some kind of dessert.  Since age 40, I've been pacing myself better:  Sneaking in an hour, or so, of nap-time between the main event and the follow-on.

 

I used to credit this to the copious amounts of turkey involved, but a little research into tryptophan sources reveals that turkey is (only?) 1.11% of the protein (Wiki chart here).

 

Turns out milk is has about twice as much (2.34 percent) and sesame seeds are pretty high, too, at 2.17 percent.  But I can't think of asking for seconds of sesame seeds  "Pass the potatoes with the seeds, too..." Nope, Ughh!.

 

Tax Planning Weekend

You might want to set aside a few hours next weekend - especially if you have a four-dayer and you're not going to be sitting in a deer blind or out shopping for Black Friday. 

 

This year, the Nation Bank of Dad has been particularly generous.  Giving away money to kids and the local food bank at a pretty good clip.  This means I'll be reviewing the IRS notes on 'gifting' and trying to figure a tax angle to generosity.

 

Seems to me that after helping kids with (variously) tuition, rent, cart repairs, and whatever, that parents ought to get a break.  I've never looked at writing off gifts (despite having given thousands in previous years) but since this year's 'gifting' is well north of 10% of income, seems to make sense to look into it.

 

Good tax counsel is suggested on any of this stuff, of course, but seems that it's worth a look-see.  Might even drive some end-of-year generosity... 

 

Buying Government Dept.

If you want to see why the government is moving er-closer to control of the internet, and you want to see a post that lays out - in plain speaking - this nonsense of campaign contributions to buy legislation, go check out the post at Liberty News titled "Which Senators got paid off to support S.510 - the 'Food Safety' Modernization Act" which comes up for a vote shortly.

 

Plain speaking like this is...er....dangerous.  Might cause people to think about how corporations have risen to dominate 'juss plain folk...'