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Friday  April 1, 2011          07:55 AM AM CST   
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Causes of Hard Times

America has fallen and she can't get up.  And what myself and a lot of economists are trying to figure out these days is "Why so?" 

 

Part of the reason, I'm pretty sure, will be found in the Federal Reserve data dump of two CD's worth of .PDF's of key bailout data won by Bloomberg which argued that when it's public money being spent, even the bankers have to tell where goes the dough.

 

And how good was the quality of paper behind the Fed's generosity?  A San Francisco Chronicle headline that the "Fed Program Accepted more Defaulted Debt than Treasuries" could be a hint.

 

As of this morning, I couldn't find a link on the Fed website to the data, which rightfully seems to have been disclosed to Bloomberg first - fair enough, they did the work and we owe them a debt of gratitude, at least, for going to the mat on behalf of disclosure.

 

Still, for an organization that espouses "transparency" (a word not much spoken these days in Washington, lol) it'll be telling whether the Fed puts up a large public notice pointing to the data.

 

Maybe not too anxious to be reported as bailing out a Libyan bank, perhaps?  That was started on the Bush clock...

---

Still, in our ongoing coverage of the Greater/Second Depression, the bailouts were themselves not causative.  Reagan, Clinton, Bush...were.

 

There are plenty of underlying reasons why the bailouts were necessary - and why QE 3 will almost certainly have to come.  Not that quantitative easing is the cure-all, but it's about all that's left in the way of options.

 

America has been savaged and pillaged by a great rush of outsourcing (jobjacking) and despite the rabid right's complaints about the lack of a border fence with Mexico, the corporatist stooges don't seem to understand that perhaps 30-million jobs a day come and go seamlessly via the internet to places like call centers and software development outfits from India to Ukraine and from northern Russia to South Africa.

 

Red herrings of the right - like union teacher, firefighter, and police officer salaries, are a poor substitute for this weekend's studies around here.

 

Those will begin with review of what my friend Gonzalo Lira has come up with as "The Causes of the Mess We're In."

 

But my own studies - which will land on the Peoplenomics side in a week, or two, will revolve around commonalities with the Great Depression and Robert T. Ely's classic, when he was econ chair at Northwestern "Hard Times: The Way In, The Way Out."

 

As Ely portrays the last Depression, it was a clusterf*ck - although no such modern slang was used - consisting of overdevelopment of new technology and resulting malinvestment, but coupled, too, with bad spending plans, poor tax policy, and agricultural change at some fundamental levels.

 

Since economic depressions aren't exactly new, I just this week finally found a copy of David Ames Wells 1895 book "Recent Economic Changes" which chronicles the Depression before the Depression...better known in history books as the Panic of 1873 which had a twenty-year ripple.

---

If you know the character Julius Perlmutter, who was a collector of nautical books, charts, and what have you in Clive Cussler's Dirk Pitt novels, I sometimes picture myself having the junior economic equivalent to that.  Not a lot of books, but some damn fine ones from the experts of the times written.

---

Talk that the Fed will be inching up interest rates this year is absolutely no surprise.  That should help the cause of gold and silver, which seems backed by people who understand that the more ink is splashed about printing money, the more the relative value of precious metals will increase.

 

The Jobs Report

8.8% seems like a great headline, but caveat emptor. Realizing that employment is key, our first real 'news' item is the new National Unemployment Report:

Nonfarm payroll employment increased by 216,000 in March, and the unemployment rate was little changed at 8.8 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, health care, leisure and hospitality, and mining. Employment in manufacturing continued to trend up.

Household Survey Data

The number of unemployed persons (13.5 million) and the unemployment rate (8.8 percent) changed little in March. The labor force also was little changed over the month. Since November 2010, the jobless rate has declined by 1.0 percentage point. (See table A-1.)

Among the major worker groups, the unemployment rates for adult men (8.6 percent), adult women (7.7 percent), teenagers (24.5 percent), whites (7.9 percent), blacks (15.5 percent), and Hispanics (11.3 percent) showed little change in March. The jobless rate for Asians was 7.1 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of job losers and persons who completed temporary jobs, at 8.2 million, was little changed in March but has fallen by 1.3 million since November 2010. The number of long-term unemployed (those jobless for 27 weeks or more) was 6.1 million in March; their share of the unemployed increased from 43.9 to 45.5 percent over the month. (See tables A-11 and A-12.)

In March, the civilian labor force participation rate held at 64.2 percent, and the employment-population ratio, at 58.5 percent, changed little. (See table A-1.)

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in March, at 8.4 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

In March, 2.4 million persons were marginally attached to the labor force, up slightly from a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 921,000 discouraged workers in March, little changed from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in March had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-16.)

Anticipating today's report, a reader who read the fine print behind the weekly data, offer this penetrating insight into how the job report game is played:

"Love those deceptive weekly declines in unemployment claims. Week 1 unemployment claims are 300,000. Week 2 unemployment claims are 305,000 down from a revised 310,000. Week 3 unemployment claims are 310, 000 down from a revised 320,000. Week 4 unemployment claims are 315,000 down from a revised 325,000. etc. Under the reporting system they use, claims could go up forever and be reported as down each week."

Necessarily, therefore, we notice that the Labor Force from the data out this morning is actually lower than it was a year ago by almost half a million people....489,000 fewer people in the workforce in a country with a growing population is irrational to my way of thinking, but that's why I don't get government job offers - ever.

 

After the annual drop of 339,000 jobs last month, the CME Birth/Death model, where jobs are estimated into existence, showed a gain of 112,000 jobs for the month.  But when 28,000 new jobs were created in leisure and hospitality - in stark contrast to airline traffic reports and empty restaurants, I found myself reaching for the ViseGrips to administer another painful pinch.

 

The market is bound to rally on this, at least in the early going.

 

Oil and Talk

In Britain, the talks with representatives of the Gaddafi government are continuing amid speculation that runs both ways on oil.

 

The WSJ online is reporting that oil has hit another 2½ year high, so we can assume the talks aren't bearing much fruit yet.

 

Reports that SecDef Gates has as a goal for Libya having no American troops on the ground sounds strangely reminiscent of previous wars from Korea to Vietnam to the Sandbox.

 

The road to hell being paved with the best of intentions, the fact is war is good for the economy, and brother can you spare a cruise missile.

 

Other Disclosure Notes

The Washington Times gets our Friday morning 'candor in headlines' award for "Barack Obama: Losing $84 billion big success."  If he needs help spending, Elaine & I will volunteer.

 

Still Smoldering

The troubles of the nuke plants in Japan are being forced off the front page of many media, looking for something cheerful to talk about, like an 8.8% unemployment rate solves the world's woes, statistical oddities aside.

 

More to the point, the story that "TEPCO confirms that groundwater radiation so bad, everyone thought it had to be an error" certainly makes me NOT want to visit the Ginza for a while.

 

Mark Your Calendar

National "Pay It Forward" day is April 28th.

 

The idea is to create at least 3-million acts of kindness that day.

 

My first act of kindness will be to stop writing right here....but no worries, Peoplenomics on schedule in the morning...

 

 

(more after this)

 

 

Friday at the WuJo

Coping: With Very Lucid Dreams

Seems like a strange thing to be reporting on - a vivid dream - but since I have them once in a while and they are interesting down at the archetype level, why not? 

 

Such dreams can occasional hold perhaps just the barest traces of predictive value, such as the dream reported here a mere 18-20 hours before the Gulf of Mexico disaster almost a year ago.  In fact, if you click over (and scroll down) you'll find this interesting part of that dream from almost a year ago:

"Last night's "movie" involved a witness to something - some ill doings - in a warehouse which served the (offshore) oil services industry. A cook who worked on a farthest out oil platform on a formation the industry called "The Wall" was involved and the warehouse was set ablaze to cover a murder. What was so interesting was that the two perps used two sources of ignition. One was a syrupy kind of adhesive (semi-clear --construction adhesive?) and then they went back and splashed something like gasoline (or other clear volatile) on top of it. "

All of which would have been a blow-off, except for a follow-on email from a reader reported later during that April week of 2010 (post spill) reporting this:

"Hello Just a note, I used to work in the oil fields (boat captain) in LA down by Fourchon and just outside of Fourchon as you come out is a section of oil wells called "the wall" because on the radar, there are so many wells it looks like a wall or line on your radar. There is a section where boats can pass called the "hole in the wall". When I read about the oil platform explosion in LA, it rang a bell! Take care,,, Capt. (name deleted)"

Well, that made it kinda interesting.  Not conclusive, but it was a near-enough dream to an event which followed that I figured this morning's dream might be worth mentioning.

--

But before I do, a couple of comments on the importance of being really 'de-stressed" before getting in to this kind of dream.  I made a short inventory of all the stresses I could find in my life, and as of yesterday afternoon, I had smacked down a goodly number of day-to-day stresses. 

 

For one, I got our 2010 taxes completed after a couple of hours of sorting oiut options trades and discovered in the process that our quarterly filing this year would be smaller, not larger...a major stress reduction.

 

Another was that with company gone, I'm back on the small stir-fry of veggies and meat with no carbbies and healthy eating may be a factor.  Plus, been reading a lot about the role of micronutrients in the anti-aging process including some like cobalt and lithium oronate...the latter having some claims being made about its gray matter restorative properties, but I'll let you Google that on your own. 

 

Our next ranch visitors will be one Elaine's sons and his wife - who will arrive in a couple of weeks, so that should be fun.  Too early to stress, though, although I will have to get my golf game tuned up....

 

My son's new ham antenna arrived and we made a very solid contact on 20-meters...he worked Ukraine from Seattle, so that seems to be working...

 

Another thing making progress is the book with Howard which continues to evolve...  So, in a nutshell, everything in life is going well because I've killed most major stress points at their source and that's fine.

---

In rereading the "Irwin Allen's Dream" piece from last year, I noticed I'd made this comment in passing: "I wish I could figure out what it is in either my diet, exercise, daily activities, or general state of restfulness that sets off what I call my "Irwin Allen Dreams"..."  Still on that quest today but the correlation seems to be high that the vividness of the dreams has a lot to do with getting de-stressed to the point where the subconscious mind can do more than worry itself about daily stressors.  When the stressors get beaten back, the mind seems to have an amazing ability to 'tell stories' that can be vastly instructive and at the same time entertaining.  Which is a long lead-in to the dream from last night, but necessary groundwork to be laid.

---

There were just a few 'main characters' in the dream from this morning; one was a plain clothes policeman who had his boat in a marina, and the other characters were the male & female story leads.

 

The story begins with the three characters coming back from a day of boating, and I got the sense it was late afternoon, perhaps four or 5 PM and that it was a weekend, but not summer as temperatures were mild and the female in the story was wearing a light sweat, jeans, and ankle-high shoes - like desert boots of Chuka boots, but a 'lite' version of them suitable for boating.  She was shorter than Elaine - somewhere in the 4'11" to 5'2 range, and long straight medium brown hair.

 

The presence of the woman wasn't bothersome or unusual, since at this point I had realized that I (the male character was seeing this stuff) wasn't George either...I was experiencing this event through the eyes of someone not me.

 

After a bit of chit-chat at the marina, the young couple headed west in their car, back toward 'the city'.  I know that trusting directions in dreams is dangerous, but it seems as  though the marina was on the south side of a lake or canal, and that a drive west would get to a bridge where they'd be able to cross a fairly narrow body of water and be back in the city somewhere near a historical district.

 

As they approached the bridge to turn right, however, there was something of a line of cars, perhaps a half dozen.

 

Suddenly, two uniformed police appeared, both carrying what seemed like black riffle cases and curiously, one of them had a holder for a pistol sewn or attached to it.  The other officer was on a radio or telephone and was being urgently informed that something bad was about to happen.

 

Just a second later, there was a dull explosion, ahead and to the left where it was like a pipeline or expansion tank for lack of a better descriptor had exploded and very thick (and obviously poisonous) black smoke began spewing into the area.

 

The man, being at the wheel made a snap decision to move left into the lane which was vacant of oncoming traffic and he sped to the bridge.  Behind him, thick, black, poisonous smoke was really starting to boil into the sky. 

 

As soon as they approached the business center/historical district, they had to leave their car because people were abandoning them, so the couple took to fleeing on foot.

 

I remember the man looked to the south-southeast and the cloud of poisonous smoke was really boiling now - up thousands of feet and headed right toward them.  There was a sense of panic and choking as the first waves of smoke (which had turned to a medium gray) began wafting through the city streets.

 

As it happened, there was a lot of reconstruction going on in the historical district, which was perhaps 8-10 blocks deep in old brick buildings which were being rehabbed. The couple entered the first one they came to, thinking they would get cleaner air inside and made their way north through a series of buildings, some with shops in antique mall fashion, while others were filled with building materials.  They were followed by a local businessman who was thinking the same thing...and at one point, he passed them as they had become tangled up in material of some kind which slowed their progress.

 

Eventually, they ran out of buildings and were walking up a a gentle incline which was not as dense as the historical district - it was one of those mixed residential, apartments, and light medical kinds of areas. 

 

The man paused again, looked to the south, and knew that they'd have to start walking east because the plume of smoke had changed a bit and was now coming directly toward them.

 

The young woman was complaining about her feet being sore - so the man took off his socks and gave them to her, so they could get moving faster.

 

The man then looked south and saw a series of either five, or six, fireballs rising into the air - almost in Roman candle fashion.  To the side, a radio had been turned up and authorities were were warning residents to get out of the downtown area.

 

Very clearly, the size of the evacuated area was given as either 800 square blocked or 880 square blocks, so it was clear that this was a very large city, on a gentle rising hill to one side the historical / business district, and there was substantial industrial/chemical processing south of town.

 

Somehow, it came to the man's knowledge that people were dying from the smoke, but he then knew they would be OK if they could just keep moving eat in order to get out of the plume.    What registered was that it was some kind of chemical "like styrene gas" which I found a bit odd, not realizing until I awoke and read up on it that styrene is initially a liquid that evaporates easily.

 

Those who were dying in the downtown area had been totally overcome, but the radio was explaining that before death came convulsions,  and there would be nausea, vomiting, and the very first indications of illness would be a massive headache.  The man seemed cheered by this because he and the woman had only mild headaches so far...and he seemed confident they would be able to make their way through one last denser part of the drifting plume and they'd then be in free air and able to travel toward friends further east and well out of harms way.

---

I awoke and noted the time:  4:41 AM.  Almost normal waking and coffee time, 20 minutes early.  I was a bit disoriented by the dream, but checking, there wasn't even a trace of a headache, and no problems with the occasional asthma, either.  The 'sticky parts' were the Roman candle like fireballs coming up and the 800/880 blocks evacuated...that seemed important.

 

There was something about the urgent question about what it was that would be "like styrene gas" that bothered me, so that had to be investigated straightway, too.

 

It's little specifics like that detail which bothers me about these vivid dreams, and drive me to Wikipedia to look up details.  What I found seemed to confirm the 'dream" knowledge.

---

As I said at the beginning, more than likely just a well-rested brain deciding to entertain itself by telling an amazingly detailed, panoramic dream-story. 

 

Logically, perhaps my mind was just dredging up some long-forgotten fact gleaned from reading the whole advanced firefighting course from the Delehanty Institute that my late father studied for his lieutenants civil service exam in the mid 1950's and chemical fires and dangers were detailed in depth.  Amazingly, I can still remember many parts of that course, which was in about a dozen to 18 black, three-ring binders with gold Delehanty markings on their front.

 

You can still find old Delehanty civil service course material from time to time at places like the Open Library.  Wish we'd kept the set.  Tons of info in old study guides.

---

Not sure why this particular dream came along, but it was totally engaging of all the senses - taste, smell, tactiles, audibles...- and I suppose a reminder to move across any plume as quickly as possible would be the security-state message to it.  But damn it was vivid and it'd make a great movie or short story; the well-rested mind is an amazing storyteller/entertainer.

 

I wonder if my writing about 'tickets' in yesterday's column helped me get into this theater of the mind.  Further, who was the Director?

 

Friday at the WuJo, 2

I'm not the only one with oddness to share...try this one one for size:

Hi George,

 

Just wanted to share this with the 'wujo' thread.

 

Every morning I go to work and park my car on the rooftop of a multilevel carpark. I have to walk down one flight of stairs to get out of the carpark. It is actually a enclosed stairwell. Anyway I walked down and opened the door and instead of facing the exit I was looking down the reverse side of the parking lot. Thoroughly freaked out I thought well maybe I inadvertently went down an extra flight. I walked back up and opened the door and I was on the rooftop. WTF!

 

I went back down one flight and everything was as it should be. Freaked me out, wondered if I had jumped into a mirror image parallel universe.

One of my motivations for NOT taking statins, despite my doctor's advice that I do so, is that there seems to be some developing evidence that statin use may be linked to TGA - medicalese for transient global amnesia.

 

This kind of stuff can happen as a side effect of things like anesthetics, or other medications, and if you're taking statins, perhaps the regular motion of walking down stairs was enough to drop you into a TGA state.

 

OR - and here's where we step onto the mat where reality meets "other" - we really are in the process of colliding with another universe, orthogonal to our own, and as the intersection occurs, we get back into a world where "magic" comes back to earth.

 

Not completely out of the realm of possibility, especially if you read about colliding universes a bit in Michio Kaku's Parallel Worlds: A Journey Through Creation, Higher Dimensions, and the Future of the Cosmos which will set you back about $11-bucks at Amazon, and which coupled with Dean Radin's grand

 Entangled Minds: Extrasensory Experiences in a Quantum Reality ($12) is a weekend or two of possibility-expanding study I'd recommend to anyone who's trying to work their mind out of being hemmed in my socially imposed paradigms which are (Big Secret here) in place to keep the real PowersThatBe ensconced.

 

TGA or string theory at work?  Let us know if you're on cholesterol meds?

 

Prayer and Pianos Department

I got flooded with emails about my "limits of prayer" discussion earlier this week wherein we questions which one rules: gravity or positive thinking when a piano is dropped on you.

 

A sampling of reader input for your morning munches:

George , maybe with regular prayer you would not be under the piano to start with. ???????

---

...don't attempt to explain how ridiculous and unscientific "faith and prayer" is. I know you are not that stupid and from a public relations point of view, well, that much I'm sure you can figure out on your own. These folks apparently know the situation as well as you do and were only asking you to join in their hopeful prayers. You didn't have to say anything, but certainly didn't need to point out the statistical problems with their request. Sheeesh.

---

Your thoughts on the relationship of prayer and action reminded me of the story from D.L. Moody, the 19th century evangelist:

 

Prayer PlusIt is recorded of D.L. Moody that, on one of his journeys across the Atlantic there was a fire in the hold of the ship. The crew and some volunteers stood in line to pass buckets of water. A friend said to Moody, "Mr. Moody, let us go to the other end of the ship and engage in prayer." The evangelist replied, "Not so, sir; we stand right here and pass buckets and pray hard all the time."

 

How like Moody this was! He believed that prayer and work were the two hands of the one person; that they should never be separated.

Moody, indeed had it right...pray for the best but run from the piano, too.

 

Being Gentle on Ben

Here's a nice thoughtful read:

"don't be hating on bernanke. without him the entire system would have collapsed and neither your children nor mine would be happy about that.

what bernanke is doing is keeping the system together after a ridiculous ponzi scheme enveloped the world. he is keeping it together with glue and thumb tacks and so far so good. is that inflationary? not really, and here is why.

the inflation concept is being misappropriated by thems that don't understand it. inflation is because at some point workers have to be paid and china has started raising workers pay. for many years, somewheres around the year 2000, we decided everything should be made in china with "free wages" and cheap oil. as those go away, that raises the cost of things, not bernanke's "printing" of money. so there has been No Labor charges included in anything that has been made for the last fifteen years, give or take. as welfare goes away, and labor comes in, this will increase the cost of things. americans have been bamboozled into believing that they have a right to "cheap."

you and me should remember that in the "old days" when school came around in the fall, we went to look for new shoes with our toes sticking out the ends of our old ones. now everyone has sixty pair of shoes in their closet. it's ridiculous.

it is a scapegoat argument to blame bernanke for this mess given that americans (except for moi) totally participated in the ponzi housing scheme whereby they bought 600,000 dollar houses and cashed them out to buy chinese chotchkes of all sorts for the houses. when postal delivery people are flipping houses, you know something is wrong. when double dipping for govt employees becomes a way of life, you know something is wrong. when retirement is moved from forty years (always the traditional line) to twenty years you know something is wrong. when women have endless children that they don't pay for but the "govt"/taxpayer is required to via welfare, you know something is wrong. hell, in massachusetts, the welfare even buys them a layette and crib (look it up, it's twue!)

this country has forgotten every single rule of honest labor and reward/ scuttled and dismantled the very pillars that made us great. so please, don't blame bernanke. he's working through a difficult situation the best he can. it's kinda like donald trump's old situation. he was so in debt the banks had to help him.

I'm not exactly a screaming "Ben Basher" as any Peoplenomics reader knows, since I often remark on the possible wisdom of trying to  gain the economic stimulative effects of war, which bailed the US out of the Great Depression in late 1941 when we engaged Japan.  That World War II drove GDP out of its 10-year slump is indisputable.

 

Where I have my issue is with candor.  I expect somewhere in the research departments of the various Fed branches, there is some damn fine research which outlines the strategy necessary to muddle through the present mess.

 

What bothers me immensely is that from about 2008, or so, the rules of investing have been changed by the various actions of the Fed and Treasury without due notice to those of us who are regular players in the Casino, if you will.

 

Thus, an honest interpretation of economic fundamentals of America, such as noting that there are no more jobs today than there were in the summer of 2001 would normally cause a rational person to be on deflationary decline (if not collapse) but that since the Fed mandate is not just monetary and extends to the whole of "economic stability", it's as though Congress while outsourcing the creation and management of money has also abdicated its role as responsible for economic affairs to what's essentially a banker-owned cabal.

 

As a result, the Fed has made a certain class of assets too big to fail and since the list was not disclosed well in advance, this screwed over the players who placed honest bets (sans insider information) on companies like Chrysler, GM, and AIG.

 

Far from Ben Bashing, I'd simple picture myself as looking for someone currently in government to stand up and "tell it like it is" rather than keeping up appearances so much.  Is David Stockman the only one who's able to articulate the truth? 

 

Why is it that government has concluded that "We can't handle the truth"?

 

An admission by government that they've overspent, are ass-deep in compound debt, and are deliberately watering down the currency's purchasing power to keep the rich hip-deep in concentrated wealth while the middle class is bent over in BOHICA fashion, would be a dandy starting point for meaningful dialog on how to fix America and capitalism in general now that the Age of Infinite Growth has eaten the nutrients out to the edge of the Petri dish.

 

I would hope Bernanke could speak that, but there doesn't seem to be any rush toward candor in Washington these days.  However, to question why that might be (answer: accretion of wealth to those already wealthy) just underscores who's side various players are on.

 

That's not a bash.  That's one American's opinion based on what seem to be facts....

 

 

Send Ure comments to george@ure.net

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Last week's report is always here.

 

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Thursday March 31, 2011

Meltdowns, Meltups, and the Mogambo

I had a wonderful day yesterday.  Why, between watching the market melt up to cover short positions which is not why I'm in a massive short position now - and add that to the fun of sorting out the annual income tax confessional and, gosh, what a wonderful Wednesday it was. 

 

I was making money disappear faster than a bonfire, although in the end, it won't matter, since Ben Bernanke, et al, are able to make fresh money appear on command.

 

All of which gets me around to awarding the first gold star this week, to my old friend the Mogambo Guru, who has penned another mighty analysis in a brief moment of economic lucidity under the title "Fractional Reserve Banking Gone Amok."  The flavor of  this piece can be discerned here:

This nostalgic trip down my path of shame is not the point, however, but is instead about “profound idiocy,” of the kind that I have alluded to in my brilliant addition to Will Roger’s famous quote, which is the idea that a crushing load of a combined, gargantuan $53 trillion in personal, business and government debt can ever, ever be, somehow, “bailed out” by continually going farther into debt to spend another gigantic, humongous load of new money created – literally! – out of thin air by the Federal Reserve.

“And the idiocy is compounded when believing, for even an instant, that in doing so it will not cause a ruinous hyperinflation, like it has all the other thousands and thousands of times in the last 4,500 years every single time any idiot government tried this Same Silly Crap (SSC).

About here, you may be asking "Why start my morning with this highly cynical although admittedly humorous take on the economy?"

 

Because the rest of the day's news is very dreary if not downright oppressive, and I keep thinking if I cheer you up on Thursday so the PowersThatBe can get one more day of sweat out of you, before you take off for the weekend of substance abuse, they'll somehow show me mercy when my turn at the wall comes up.  OK, self-serving, but WTF?

 

On the other hand, that is a far-fetched notion, so fire up the Geiger counter and let's go count meltups and meltdowns.

 

Markets Melting Up

Sure at hell a bit short-covering festival going on in markets.  What happens in a meltup like this is a bunch bear (decline side) players like me, place bets that the markets are rational, will react to the massive decline in personal savings implicit in the (further) collapse of housing prices this week and will do the only possible thing:  Drop like a free-falling piano.

 

The Dow popped up almost 72 points yesterday, despite more warring over Libya and oil pushing back up to the $105 level as the Bush glorified [Time: "Why Gaddafi's Now a Good Guy" from 2006] and Obama/Clintonista demonized Gaddafi has taken back a key oil port, 

 

As someone committed to accurate sports play-by-play, I just cringe and duly report "OK War fans, we've still got the republicorp out front, three wars to one, but look out, Hillary's got time and weasel-words galore, so let's see if we can get interventions going in Bahrain, Syria, and Yemen too, while the democorps are still at bat.

 

ViseGrips?

 

The press, which know if you follow any politician around long enough, they will say everything and express every possible position as long as no one has any Super Glue handy to make them stick to their words, had managed to drag out an Obama 2002 speech where he says toppling a dictator is a "dumb war."

 

Which, or course, we all knowingly nod, around here and nudge one another nervously, knowing full well that without plenty of resource-wasting war and cheap oil to keep us greased into happiness, the whole world of PTB-globalistas falls apart and humans get back to the tribal level of existence, which, sorry, seems unfortunately to be accompanied by a higher-than-used-to-be background level of radiation.

 

Of course, it's only Thursday, so if you would please just keep being hoodwinked for two more days and going to work like a good little corporate serf, maybe the sky will open and manna will fall on us around 4 PM tomorrow.  And if not manna, would you accept a couple of brewskis and a hotdog with the Mariners down at Oakland tomorrow night?  Something poetic about Seattle's opener being away on April Fool's Day.

 

That reminds me to make a speed run to Lowes to pick up a couple of quarts of paint for Elaine & me.  Next time she says baseball is like watching paint dry I've promised to make a more fair comparison. 

 

Yankees and versus Detroit this afternoon and cold enough to keep the beer chilled throughout.

 

Clean Miss

One thing we don't have to worry about - at least as of press time - is the major West Coast earthquake which didn't appear as expected.  A reader has an interesting thought on this:

"If one looks at the facts only, arriving at no conclusions based on emotionally based assumptions, it seeeeeeems to me (as in "appears") that a clear pattern has formed regarding the Web Bot data: the closer the impact of an event is to including Olympia, WA, the less accurate the forecast. Make a chart. Look at the data, not assumptions, presumptions, or anything else. "

More than likely a big tune up on the lexicon is in order, since language drifts around horribly.  Not that we won't get a quake, at some point, but since time is all event/correlated with no handy clocks or calendars, the system's gonna miss sometimes.  And missing on a 10 magnitude kind of West Coast quake is just fine.

 

Still getting little quakes in Arkansas and a couple overnight on the big island of Hawaii -- worth noticing.

 

Nuke Madness

The story in PCWorld this morning about "Debris prevents robots from entering stricken nuclear plant" gives me one of my best-ever marketing ideas for a niche product.

 

We simply scale up the iRobot 560 Roomba Vacuuming Robot, Black and Silver with a three cylinder 18 HP Yanmar diesel and tack weld a Bush Hog on the front of it,  then.....

---

But, seriously, as my pal the reactor operator a few states north pointed out, one of the reasons we see stories like "Radiation traces found in U.S. milk" is that instrumentation has gotten sooo much better since the old days.

---

Contrary to popular belief, the apparent genetic disposition of Midwesterners to blindly believe whatever comes from the rabid tight is not a result of the fall out of US nuclear tests in Nevada early on.  Fluoride's a more likely suspect.

 

Point being that if the whole science of instrumentation can detect you smoking a joint (doodie or leg, depending on age & location) 100-days ago, and you're not still stoned from that, odds are your glow-in the-dark watch is as big a health risk...

---

But seriously serious:  The Japan Times reports that" high radiation has been found outside the no-go zone" but in their fine tradition of nuclear whitewashing, the Japanese authorities are not expanding the evacuation zone.

 

Gotta wonder if the Japanese studied emergency management in, oh, New Orleans, for cryin' out loud...

 

Medicine has a commandment it lives by "First do no harm."  You're welcome to submit your take on what government's motto should be, although my favorite so far is "First, leave no money or evidence..."

 

Rally ON

Weekly unemployment number improved again:

In the week ending March 26, the advance figure for seasonally adjusted initial claims was 388,000, a decrease of 6,000 from the previous week's revised figure of 394,000. The 4-week moving average was 394,250, a increase of 3,250 from the previous week's revised average of 391,000.

The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending March 19, unchanged from the prior week's unrevised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending March 19 was 3,714,000, a decrease of 51,000 from the preceding week's revised level of 3,765,000. The 4-week moving average was 3,765,250, a decrease of 32,750 from the preceding week's revised average of 3,798,000.

Damn, being a bear is expensive here lately.

 

Self Fulfilling Forecast Department

"Wal-Mart CEO Bill Simon expects inflation" headlines USA Today this morning.

 

He apparently hasn't shopped his stores around here....that stuff's already peeking out of most aisles...

 

Coping: With Tax Time & Stress

I imagine a lot of people will be spending the coming weekend snuggled with TurboTax or the various other software tax packages getting theirs returns done.  It's a topic that once broached always gets a lot of reader comment, usually from people who opine that the federal government - since it's now a corporation, is not longer government and therefore they have not tax liability.  This is often accompanied by arguments about 'straw men', issuance of Social Security numbers and a lot of other.

 

On the other hand, as anyone can plainly see, the one with the most guns 'wins' and no doubt about who's got the most guns (with runs the gamut of the threat of audit, right up to paying for the goodies at Pantex) and mas I've often said, Pappy didn't raise no fool.

 

Unlike some folks, I decline getting involved in whether paying this tax or that is legal (it's probably not) of moral (again, probably not and demonstrably more so) but what paying taxes comes down to is practical.

 

As much as I might admire those who stand their tax ground, I'm pragmatic enough to figure out that people create their own stresses in Life and that's one reason (more than likely) why Elaine and I look 10-15 younger than most other folks our age:  We've both led approximately stress avoiding lives.

 

Not that a little stress isn't bound to creep into everyone's life, but stress arrives in folk's lives and then hides in plain sight.

• For some, the arrival of stress brings with it tobacco use.

• For others, it's hitting the sauce/alcohol too heavily.

• Still more fall to drug abuse.

• Then there's the people who get stressed and eat (besides Zeus the cat, who seems bent on fulfilling his lack of mousing success with canned tuna dispensed by the cute, trainable blonde lady...)

Not that we don't all exercise what my little sister calls her "traffic finger" a lot; someone climbing up the rear bumper deserves that and worse.

 

But it's how we deal with stress that largely determines whether we depart this world early or late, since stress is a well documented underlying precursor to the big C, heart attacks, diabetes, and so forth.

---

I began keeping track of stress early in life.  Once, I noticed (while piloting one of the succession of Porsches) that I was feeling as much stress as pleasure from the event.  "How could this be?" I wondered. 

 

Well, turns out that when I occasionally exceeded the speed limit by some low multiple (1.3 to 2.2 times posted) I wasn't stressing about the driving conditions so much as about the potential for an unpleasant encounter with law enforcements.  Once I figured that out (about age 61) it was easy enough to give up the red whale tail and drive around a used Lexus or farm truck where the only use of the rear view mirror is occasionally...and only very occasionally at that.

 

Income taxes works the same way.  When I was in my 30's, I remember going to the mailbox one day and looking at a letter from IRS.  "Oh my God!  Audit time!" was my first thought.  Actually, they sent me a $12 correction in my favor.

 

That was it!  I decided then and there that I'd have meticulous tax records and so as of today I will finish up this year's package which includes a spreadsheet with more than a dozen tabs, justifying everything from business travel to software and computing costs, to  matched up CUSIP's for all my option trading.

 

Not that I have become less rebellious or free-spirited as I've gotten older; I've just come to recognize stress and where it comes from a little better.  Some stress if good (like the pressure of getting up at 5 AM and writing a column every morning, or doing maneuvers in an airplane...all good/positive stress).

 

But the bad stresses that come from habitual lateness for meetings, watching the rearview mirror more than traffic ahead, or over the next few weeks - the annual tax festival - all these can be eliminated or reduced by simply changing one's attitude toward life.

 

I've often described life as getting on one of the "E" rides at Disney Land, back when rides were differentiated by price with "E" rides being the most expensive.

 

Everyone gets up and 'hands in a ticket' for another day on the ride.  If some people are compelled to 'ride the Space Mountain' scary ride - which is what challenging income taxes (or speeding) is akin to - then fine for them.  My tastes run more to the Pirates of the Caribbean or The Haunted Mansion.

 

Another way of saying Life oughta be somewhat an adventure, but moving along like a slow boat looking at stuff - being scared on cue, but just a bit.

 

This is only a ride, after all.

---

Whenever I read about how this group of scientists, or that, is putting implants in monkey brains, or how tracking devices are being put on animals in the wild, I get to wondering what the scaled-up version of that would be like it we humans were the animals tagged and tracked?

 

So it that what's behind all the stuff about human abductions and experiences of the other-worldly (and in some cases spiritual encounters with things like demons)?  Perhaps.

 

One of the beast questions occupying my thinking time lately (both minutes) is whether the whole of Earth isn't something like a cosmic E ride where what goes on inside our head has something of a video recorder to it, and when each of us dies, we get to leave the game only with what we video'ed turning this lifetime of game play.

 

Yes, I've done the Tower of Terror, but at heart, I'm really more the stand at the cliff at Machu Picchu kind of tourist, preferring sailing and taking it all in to  Unnecessary stress like lateness, speeding or chiseling on taxes.  Don't need the stress taking up valuable mental VCR space as we've got plans for many more videos to take before getting off this ride.

 

Elaine and I are spending some time over the next couple of weeks planning those. 

 

With time freed up from stress, and understanding a lot about process and how to wield that tool, there's time left over to star in our own videos to store between the ears.

 

Limitations to Prayer Dept.

Oh, a comment on how this here E ride works - since I just got another email requesting my urgent prayers to stop the nuclear meltdown in Japan.

 

Not saying that prayer doesn't alter outcomes, but it's a low-level influencer in most cases I've studied.

 

Like standing under a piano falling off a tall building:  There's a time to pray, but there's also a time to move/be in motion.

 

Let me turn this into a simple statistics problem: which one would I trust:  prayer or acceleration at roughly 32 ft. per second per second applying itself to 600 pounds of falling piano?

 

Not sure your views, but to me, this one is not too difficult as I have no confirmable reports of pianos stopping in mid-air.  Of course, maybe I just missed it....

 

Email of the Day

"Become a Multi-lingual Master:  Learn a new language in 10-days -- 100% Guaranteed!"

 

Decline.  Still trying to gain basic English/Weblish/Txtlsh skills.  But thanks for offering to take my money...got that one covered already:  married with kids...

 

Ham Radio & Notes

Chatting with my son on 20-meters last night and guess what?  Had a call from an old friend - late 1980's - who retired from the phone company (when there weren't as many of them around). 

 

Invited him to meet up with us on 14.225  usb this morning at 8:30 but he declined.  Explained that retired people don't have to get up so early. 

 

Noticed that when I called my sister about noon (Seattle time) to see how her flight was.  "Oh, I was going to call you, but I'm just getting up...") same kind of reply...why people sleep in is a mystery - life's already too short.

---

Speaking of radioy things:  Got this here email:

George, I'm sitting at my desk and I just got a replacement Garmin NUVI GPS. (My first one was not able to communicate with my computer.) Well I plugged it into the power on my Computer to charge the battery and it showed me at my home. Then it began to drive around thru the mountains around me where there are no roads. Right now it says I am going 18, no now 37 mph on the crest of the mountain behind me. (no roads.) Now it says it has lost satellite reception. Flashing a ? over the car icon, but some 2 miles from home.

Are the satellites moving around, or is the earth moving under the GPS Satellites? Real weird as it is now moving again at 3-6 mph. All the time it has been on my desk in front of my computer screen. Is something going on with the planet. Haven't looked to see if there are solar flares hitting us now. 11:20 PM PST. I'm in Green Valley, California. (North of Santa Clarita about 25 miles) An unincorporated area in the mountains (Los Angeles National Forest) between Los Angeles and Palmdale, CA.

I am headed west!!! That would take me off to Lake Hughes, CA. I'm going 5.7 mph and getting onto an unmarked road(probably a dirt road). Now going NE! Heard anything like this? I am in the bottom floor of the house with another story above me and didn't expect it to lock onto any satellites). Perhaps it only has a lock on one satellite?

This afternoon I looked at the earthquake map for the USA. There seems to be a lot of activity in Utah and West Montana (small Quakes) and that area was quiet for months. Perhaps magma moving up to Volcanoes in the north or signs of plate movement for Oregon and Washington ?

Radio answer man 'spains:  The GPS system comes in a number of "accuracy flavors".  From the top they run something like this:

• Military precision:  This is as good as it gets.  Smart weapons stuff uses this level.  We might no more, but we don't talk about stuff like that at breakfast and without a strip search for recording devices.  Drop your keys and this level will find them and pick out the trunk key.

• Differential:  By using an external (terrestrial clocking source) you can improve the accuracy of GPS to a couple of feet.  Within an inch or three of dropped keys.

• Wide Area Augmentation System (WAAS):  Similar to differential, but good only to a circle 25 feet in diameter.  May also be subject to the 1725 MPH speed limit of civilian GPS - haven't had that one come up in a biennial flight review lately.  Same room the keys are in.

• Regular GPS:  Error rates are a function of two things:  First is 2DRMS error which is a subset of circular probable error.  The second is the number of satellites which are currently calculated (3 or more are needed) but some receivers use various anticipation schemes (for when you go under an overpass while driving, or through a tunnel.  In which case the local position when stable may exaggerate errors under certain conditions. 

Oh, and about those keys:  Civilian level will get you to the right house most of the time but seems you actually dropped your keys in California somewhere, .0000000000000002% of the time.  Dither (location offset) may be moved around pretty much at will by DoD but the airlines tend to get pissy when they find their approaches are too far off, but then again, that's was glideslopes and VOR approaches are for...call the backcourse localizer and check the HSI against the IFR certified glass panel.......oh, my head hurts...can I just finish my taxes and call it good for the day?

 

This is called dithered and dipped by some, but more broadly:  California is lost, you're not, at least based on your sense of good reading material.

 

Now be a good little corporate serf and wait for the ball game this afternoon...

 

---

Wednesday March 30, 2011

Read 'Em & Seep: The Petkau Effect

Before we get into our daily dose of reactors trying to melt, I thought (prompted by a reader) to discuss something called the Petkau Effect.  That what?   Well seems in 1972 this paper was published based on the research of Dr. Abram Petkau up in Canada (at Whiteshell) and it discovered that oops!  Ionizing radiation behaves in a nonlinear way when you're looking at cell damage...Wikipedia's entry picks it up from there...

Petkau had been measuring, in the usual way, the dose that would rupture a particular cell membrane. He found that 3500 rads delivered in 2¼ hours (26 rad/min) would do it. Then, almost by chance, he tried again with much weaker radiation and found that 0.7 rads delivered in 11½ hours (1 millirad/min) would also destroy the membrane. This was counter to the prevailing assumption of a linear relationship between total dose or dose rate and the consequences

Petkau's findings are a critical part of understanding the recent seeding of pretty much the whole earth with radioactive this-n-thats, everything from the Chinese, Russian, US, etc nuke tests, to the use of depleted uranium in various projectiles all over the sandbox (I'm waiting on DU (depleted uranium) shells to make their way in the Libya conquest).

 

Not to be too blunt, let's also look up common sources (besides microwaves) ionizing radiation:

Examples of ionizing particles are alpha particles, beta particles, neutrons, and cosmic rays. The ability of an electromagnetic wave (photons) to ionize an atom or molecule depends on its frequency, which determines the energy of its associated particle, the photon. Radiation on the short-wavelength end of the electromagnetic spectrum—high-frequency ultraviolet, X-rays, and gamma rays—is ionizing, due to its composition of high-energy photons.

All of which is useful information to have in mind when reading stories coming out of Japan this morning - and judging by the lack Petkau effect references in various news operations, we have to assume that the level of general competence when it comes to understanding the nonlinear effects of long term, lower level ionizing radiations is pretty dismal.  But, as we are continually reminded around here, just because a critical bit of information is not in the news doesn't mean it isn't critically important in evolving news going forward.

 

Unless, of course, the media covering 'news' is not covering pure news at all (which is a contexting effort) rather than just throwing facts around in a willy-nilly disconnected, non-contextualized way --- which if you haven't noticed --- is what media empires are made of lately.

 

"Toxic plutonium seeking from Japan's nuclear plant" headlines a Bloomberg piece.  Not that we're surprised, mind you.  That is ionizing stuff, ain't it?  Read 'em and seep.

 

The Radioactive Volcano Problem

File under Lingo-Lango, Wednesday, damn-oh: The one other thing we're watching closely is the evolution of the predictive linguistics language expectations around "radioactive volcano".   Linguistic fill for short.  

 

Here, the problem is not so much one of grasping non-linear systems as it is trying to sort out whether we're talking two disconnected contexts which just happen to be temporally adjacent within a single country/region, whether we're talking a cojoined (interrelated) semi-discrete events with a cojoined outcome, or whether we're talking a pure aspect or attribute which would be either radioactive something becoming "volcano" or a volcano becoming radioactive.

 

For the discrete events argument, we notice the two Korea's have held face-to-face talks over the the possibility of (pure/discrete) volcanism issues.

 

At the other side of 'discrete events' we are pondering this note from a reader:

"Good morning George,

I assume you saw this article yesterday from the Guardian but in case you didn't, here it is. I send it along with compliments because it mentions that the core is melting and flowing "like lava".

Hmmm...a radioactive vulcano. The actual quote is,

Lahey said: "It won't come out as one big glob; it'll come out like lava, and that is good because it's easier to cool."

And there in a nutshell is the problem of using language to look into the future:  We have two (nuclear equipped) powers - the Koreas) talking about volcanism and we have a present-day meltdown trying to happen with volcanism terminology cropping up.   See the use of the term "...radioactive lava is leaking into...." here.

 

When seen 9-month ahead of any of the actual events taking place, I assume you can  discern he difficulties of a rickety time machine use.

 

Attention Math Students

If you want something really fun to do, go look at the NOAA Space Weather alerts for the month and see if you can cobble us up a correlative framework to expanding plasma core (of earth) and frequency/magnitude of earthquakes. 

 

Meantime, I'm on the edge of my chair waiting to see what Tony Ring's earthquake data for the month looks like when he gets time to compile it late this week...we'll pass it on when it comes out...or is that in...hmmm...more coffee...

 

Meanwhile, back at the Meltdown

First the breaking news out of Japan, which is the Japanese trade ministry has ordered new safety requirements for N-plant operators.  Better late than never?

 

Again, somewhat oddly, the MainStreamMedia seems curiously reluctant to use the world 'meltdown'.  Yet, in this morning's briefing from the International Atomic Energy Agency, we see that meltdown is in fact what's going on (see highlight):

Accumulated contaminated water was found in trenches located close to the turbine buildings of Units 1 to 3. Dose rates at the surface of this water were 0.4 millisieverts/hour for Unit 1 and over 1 000 millisieverts/hour for Unit 2 as of 18:30 UTC on 26 March. The Nuclear Safety Commission of Japan suggests that higher activity in the water discovered in the Unit 2 turbine building is supposed to be caused by the water, which has been in contact with molten fuel rods for a time and directly released into the turbine building via some, as yet unidentified path. An investigation is underway as to how the water accumulated in the trenches. Measurements could not be carried out at Unit 3 because of the presence of debris.

Fresh water has been continuously injected into the Reactor Pressure Vessels (RPVs) of Units 1, 2 and 3. From today at Unit 1, the pumping of fresh water through the feed-water line will no longer be performed by fire trucks but by electrical pumps with a diesel generator. The switch to the use of such pumps has already been made in Units 2 and 3. At Unit 3, the fresh water is being injected through the fire extinguisher line.

At Unit 1, there has been an increase in temperature at the feed-water nozzle of the RPV from 273.8 °C to 299 °C. The temperature at the bottom of the RPV remained stable at 135 °C. Temperatures at Unit 2 appear relatively stable at the same measurement points. At Unit 3, the temperature at the feed-water nozzle of the RPV is about 61.5 °C and 120.9 °C at the bottom of the RPV. The validity of the RPV temperature measurement at the feed water nozzle is still under investigation.

Now, to the average nutjob, molten fuel rods are a meltdown, although a little checking finds of 21,402 hits on the single word "meltdown" which is applied much more widely to things like the antics of humans, narrowing in to the search subset "partial meltdown" hit 3,622 references which indicated to Mr. Cynical that the mass media is still looking at this in terms of a little bit pregnant.

 

Against this background, the NY Times report that the "Japanese operator says it will scrap four reactors at plant" simply fills what around here has been a foregone conclusion.

 

Death by JIT, Revisited

In last weekend's Peoplenomics report, we were way ahead of the curve, but we can now see how the just in time (JIT) manufacturing process is about to 'bite world'.

 

What's interesting from a longwave economics perspective is that the markets globally are still in denial about the emerging massive impacts from the quake and meltdowns.

 

The reason may be the bullish bias of analysts.  Take for example thre story that Texas Instruments sees a 6 month disruption from its chip plant in Japan.

 

On the other side, a press release reassures investors that "TI's Japan factories on track for full recovery..."

 

A look at a 3-month chart of TXN shows the stock already above general prices levels of January, and while the stock dropped a good bit after the quake, it seems to have bounced right back.

---

Meantime, we have reports that industrial production in Japan was up in February, and it's almost a foregone conclusion that the impact of the quake and shutdowns on things like auto and electronic production will not impact the US market until the April reporting period (May June for us by the time backward-looking statistics are written). 

 

Notice that it's only this morning that we're getting Japn's industrial output was up in February being reported.

 

Only marginal impact should be evident in the March numbers, since as the supply chain goes, the shipments from Japan for March were largely always aboard ships or aircraft.  No doubt there was finished product on the docks at either end, not to mention what was already in the supply chain.

 

Prediction:  The impacts will be seen fully by June which ought to give the distribution channels time to empty out a good bit.  and when it does, prices will go up and that will add to inflation.

 

Fortunately the wisdom of government will protect us from seeing any upward adjustments in Social Security or military pay, though since BluRay players and a new Accord or Camry is probably not part of the number-fundging core rate which also excludes luxuries like food and energy...and just never-you-mind about the headlines like "Tsunami halts Japanese Car Production..."

 

Irrational Markets to Continue

Just for the hell of it, let's think about the world right now in a cold way:

• Housing prices continued their second big decline in the S&P/Case housing numbers out yesterday.

• Libya is turning into another long-term war for the West as Marines from LeJune head that way

• Portugal is borrowing more than ever...

Why, toss in Japoan's meltdowns and what does it sound like?

 

Irrational Markets 101.  The Dow seems headed for another higher open this morning.

 

How the Magic Works

As I was applying my ViseGrips (Pinch me!) this morning, it occurred to me that as long as the government can keep up the waste & tax program, there's no way for rational markets to exist.

 

Super Ben and Treasury Tim apparently have a list of "too big to fail"  and frankly, as an investor, I would appreciate a copy of that list so we can all line up - like the insiders - and put our money into these can't lose propositions.

 

Meantime, we're still waiting for the Fed to come clean after the US Supreme Court said to hand over TARP specifics, but nope, haven't seen that stuff yet.

 

What I do see is the Hype Machine doing what us old-line marketers would call 'seeding the market' with positive press reports so that when the data comes out, it won't be such a fart-in-church with its impact.

 

Why look!  Here's a story in the Washington Post about "Why TARP has been a success story." 

---

Meantime, I'm still trying to figure out what yesterday's "New York Fed purchases $2.180 billion in tri-party reverse repo as part of the operational readiness program announced on March 23, 2011...." was all about.

 

The NY Fed reassures us that "These operations do not represent a change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future."

 

The more I study the complexities of this, the more I feel like I've wandered into a dark alley where there's a game of Three Card Monte going on that only the Big Players are able to follow.  Mysteriously the Big Players seem to be making money hand over fist while markets that ought to be figuring out the mess America is in, seem to Blythe ly ignore reality.

 

Jobs: The Most Horrible Facts

When I was talking with my deflationist pal Jas Jain this past weekend, he made a remarkable assertion: "There's been no job growth in the US in 10-years!"

 

Made a note to follow up on that and sure enough, here's - fresh from the BLS database - it the unadjusted employment data for 10-years:

 

 

Close enough to right?  Lemme see total employment in July of 2001 was 138.239 million which is actually higher than last month's 138.093 million!

 

Holy frigging smokes!  Total jobs held is down 6.26% from the peak of the Housing Bubble Madness in 2007, too.

 

Let me put on my best Clint Eastwood voice for this:  "Your know what this is punk?  It's an i7 920-series with 12 gigs of ram, four monitors, and 4 MB of bandwidth 3-hops from fiber.  Now, do you think I won't pull this data, punk?  Do you?"

 

Except, of course, the lick of my wireless mouse and keyboard is not as imposing as a .44 magnum, but we have to work with what we have around here...but I go ahead, it makes my day...

 

Not All Bad

Still, there's some reason for optimism in the ADP jobs report for March just out today:

Private-sector employment increased by 201,000 from February to March on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from January 2011 to February 2011 was revised down to 208,000 from the previously reported increase of 217,000.

 

This month’s ADP National Employment Report removes any remaining doubt that private nonfarm payroll employment accelerated heading into 2011....

Also out:  The Challenger job cuts report - also moderating:

While government-sector job cuts rose to their highest level in 12 months, the pace of downsizing declined in March as employers announced plans to reduce payrolls by 41,528 jobs during the month, down 18 percent from 50,702 job cuts announced in February.

 

The report on March job-cut announcements released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc. revealed that March job cuts were down 39 percent from a year ago, when employers announced 67,611 job cuts.

You just know this is gonna make the rabid right nuts, of course, since it just might mean the financial world won't end under Obama and gosh, not like the GOP are the only guys who can spell muddle-through...
 

Fine Ad Campaign

I don't usually pimp ad campaigns, but the Independent Community bankers of America seem ready to ride the rising wave of public opinion with this one:

 

 

The ad copy is pretty good, too...here. 

 

The GlobalRev is not about killing...it's about change at the top...and corpgov bankstering is a fine starting point, which goes along with shunning nicely.

 

Speaking of Guns

..and gums...I see Clinton meets in Paris with a Libyan Rebel Leader...wonder if she can talk them to death?

 

Elsewhere in the GlobalRev Syria's cabinet resigned yesterday and the president says he's going to make sure the country survives foreign-hatched plots. 

 

Not that things are peaceful on the home front with "11 hurt as Chicago shooting spurs bush crash."

 

The shooting of president Regan was 30-years ago and former WH press sec. Jim Brady is still lobbying...

 

Coping:  Adult Supervision

After dropping my sister off at the local airport for her trip back to Seattle, I managed to strike a reasonable deal with Elaine.  Been meaning to get into the Northern Tool outlet in Tyler, Texas for a good long while and finally got 'er done. 

 

I remarked to one of the clerks on the way in "I'm not allpowed to enter stores like this without adult supervision and that's her job..." as I could feel the sweat on my palms from the amazing array of...of....evertyhing I need to have for the shop.

 

My first stop was to find nutdrivers for the electronics workbench.  My previous set has been scattered to the winds...only the never-used-sizes seem to be readily available.

 

Sadly, they didn't have a set with all the odd sizes from a 1/2" down, but that didn't stop me from asking "Hey...this 205 piece rotary tool set...will it fit my Dremel?"  "Oh yessir..."

 

Another tough call:  I have a Dremel set of 100-odd that isn't open yet...should I pop the $25 just to make sure I don't run out?  Nope....self restraint kicked in.

 

But, no worries, since there was plenty we really needed - like a backup to the diesel manual diesel pump ($40 for a barrel pump) a jug of chainsaw bar oil and various other farmerly-rancherly stuff.

 

Amazingly, I got out only $88 and change lighter...which as any sworn member of the Home Handy-Bastards Club knows is almost as big a feat as quitting smoking or giving up booze.

---

Then it was on to dinner. 

 

Elaine and the sister unit had sized up The Sonoma Grill and given it a thumbs up...and darned if it wasn't great.

 

Menu is varied, but the three main features of the visit were, in no particular order:

• Eric - the barman - makes a perfect gin martini - which I thought was a lost art hereabouts.  That in itself would have been worth the trip.

• But then we get to the bread and it was awesome.  Doing home baking and such I've gotten mighty particular, but the bread was fresh, moist inside and crunchy outside...as such loaves should be (pats of butter instead of whipped) but I swore them to secrecy about the cholesterol binge.

• And our entrees were absolutely incredible.

Dinner was less costly than the tool shopping.... So not only did I get my sister safely off to Seattle, but I somehow managed to negotiate a fine meal and a trip to Northern Tool. 

 

I'm still trying to figure out how I worked this out, but if I can distill it down to a repeatable formula, I think I could sell it for millions.  Perhaps it really is, as Clif often reminds me:  Universe favors George.

 

Damned if I can figure why, but let's not look the Gifter of chicken piccata in the eye, shall we?

 

---

Tuesday March 29, 2011

Bummer:  Case Shiller/S&P Housing Data

As promised, hot off the press release is the monthly Case/S&P Housing report, which to my way of thinking is the best overview of how things are really going in the beleaguered housing industry such as we've got...

 

Here's the summary:

New York, March 29, 2011 – Data through January 2011, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show further deceleration in the annual growth rates in 13 of the 20 MSAs and the 10- and 20-City Composites compared to the December 2010 report. The 10-City Composite was down 2.0% and the 20-City Composite fell 3.1% from their January 2010 levels. San Diego and Washington D.C. were the only two markets to record positive year-over-year changes. However, San Diego was up a scant 0.1%, while Washington DC posted a healthier +3.6% annual growth rate. The same 11 cities that had posted recent index level lows in December 2010, posted new lows in January.

 

The chart above depicts the annual returns of the 10-City and the 20-City Composite Home Price Indices. In January 2011, the 10-City and 20-City Composites recorded annual returns of -2.0% and -3.1%, respectively. On a monthly basis, the 10-City Composite was down 0.9% and the 20-City Composite fell 1.0% in January versus December 2010. Only San Diego and Washington D.C. posted positive annual growth rates in January 2011. These are the only two cities whose annual rates remained positive throughout 2010. Every other MSA has either moved back into or has always been in negative territory during the recent housing crisis. On a monthly basis, Washington DC was the only market where home prices rose in January, but up only 0.1%. The remaining 19 MSAs and both Composites fell during the month, with 12 of the markets and the 20-City Composite down by at least 1.0% versus December 2010.

 

“Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's. “With this month’s data, we find the same 11 MSAs posting new recent index lows. The 10-City and 20- City Composites continue to decline month-over-month and have posted monthly declines for six consecutive months now.

 

“These data confirm what we have seen with recent housing starts and sales reports. The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery. At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing. A few months ago we defined a double-dip for home prices as seeing the 10- and 20-City Composites set new post-peak lows. The 10-City Composite is still 2.8% above and the 20-City is 1.1% above their respective April 2009 lows, but both series have moved closer to a confirmed double-dip for six consecutive months. At this point we are not too far off, and that is what many analysts are seeing with sales, starts and inventory data too.

Gee, seems that Mr. Ure's outlook for a continuation of the housing decline (and lack of jobs recovery) is moving along just as predicted.  Oh, and did I mention this does serve to underscore Jas Jain's great (nearly unshakeable faith) in deflation?  We'll see how the metals and markets react today and tomorrow - should be instructive...

 

file: Housing Recover under Eastern Bunny.

 

Warring Contexts

"It could be argued..."

 

As depressing as some of the stories in the headlines might be this morning, let's get one thing clear at the outset:  News is only bad if you have the wrong context.

 

We can already see how the MainStreamMedia is starting to turn on itself (an interesting gyration to watch) with headlines asking things like "Is Media Matters break the law in its 'war' on Fox News?" while another site claims that "Mexico's largest media corporation behind plan to censor drug war coverage."

 

Of course technology change is certainly a driver - and when I noticed the report "Phuket media coverage takes a leap forward with iApps" I thought to myself, "Gee, how could I become part of the Phuket media?"

---

I especially think Phuket when I review the media circus overs the coming month's-long war in Libya.  I seem, to have a little different perspective on things that Fearless Leader who was nattering on about how we have a responsibility as a great world leader (yada, yada) to intervene in Libya which anyone in their right might would notice has everything to do with oil and little to do with anything else.

 

The Pentagon has put a price tag on the first week of the war - $600 million, but don't be disappointed, we've got another open-ended war and  although it was perhaps buried in too muchy economic fact to suit some in yesterday's column, here we are seeing if corpgov and the Fed can jointly print and spend enough to gain the economic stimulus of war which is why WW II was so critical to ending the first Great Depression.  If we can just collapse the Debtberg and fight enough wars on whatever pretext.

 

What most people aren't asking - and it's the hardest question of all because it tends to sift the wheat from the bullshit (to put it directly) is "How come it's OK for the republicorps to go off starting unending wars and the democorps can't?"

 

Say, did I mention that city in Thailand?

 

Gads Nukes

When I checked earlier this morning, the national radiation map was not up in the 100-range which they've pegged as their 'alert level'.

 

However, the International Atomic Energy Agency briefing for Monday night notes that "Japan confirms plutonium in soil sample at Fukushima Daiichi" and then goes into more detail:

"Traces of plutonium are not uncommon in soil because they were deposited worldwide during the atmospheric nuclear testing era. However, the isotopic composition of the plutonium found at Fukushima Daiichi suggests the material came from the reactor site, according to TEPCO officials. Still, the quantity of plutonium found does not exceed background levels tracked by Japan's Ministry of Education, Culture, Sports, Science and Technology over the past 30 years.

Part of the problem with radiation is most Americans are extremely ignorant of what it is - and what it is not.  What I'd suggest is that somewhere on your bookshelf should be a copy of Nuclear War Survival Skills: Updated and Expanded 1987 Edition which will set you back about $20-bucks at Amazon.

 

We've been flooded with questions like "How much dirt should we have over us?" but instead of me trying to answer an overflowing email inbox, please read the book and realize that there are just some parts of modern technology, which - while they may appear as magic - are noting more than application of some very solid rules of chemistry and physics.

 

If you haven't read the rules, and I don't care if it's how machine code works on the 8088 chip, or how radio wave propagate differently depending on frequency, there generally is not magic and once you 'get it' with the rules, the world really is a somewhat orderly place.

 

Orderly Nukes, Too

Of course, having a well-informed public may not work out for the PTB, and it's with this thought in mind that we pass on the story that "Germany, Austria, Switzerland pull Simpsons episodes that Make Fun of Nuclear Meltdowns."

 

What was it my PTB minion source told me?  Ah yes..."...the movies are the messages..."

 

Readers Wonder

About things like this:

"Thing I wanted to say, you pointed out that even the NYT was beginning to ask what would become of all that water they squirted into the reactors--finally. The water that is in puddles now glowing in the dark.

I have to tell you, and my friends (including a Peoplenomics Subscriber) will attest, that I have been asking what they were going to do with all the radioactive sea water from all the squirting ever since they started spraying the water in there.

So since I had the idea first I gess that means I am a Nuclear Physicist."

Absolutely!  All seriousness aside:  Self-warming salmon entrées - and they'll keep for 25,000 years without refrigeration!  Go with us on this...

 

Tomorrow Under the Big Top

While most of the world gets sucked into debate over Libya (that ship done sailed) the second ring of the circus oughta be worth watching tomorrow as the Subcommittee on TARP and Financial Services holds a hearing on the notion of "too big to fail."

 

Adding Insult to Injury

Eh, wot?  Like the anti-union diatribes of the right aren't bad enough for teachers, here comes Fearless Leader saying too much testing makes education boring...

 

I thought the word was accountable...

 

2012: No Worries

I can say that with confidence now, know why?  Because the Federal Reserve has schedule a rate meeting for January 29-30 of 2013 now...lol.

 

Working for FREE

Don't know if you saw it, but a watchful reader spied the story on the Fortune/CNN website this week "Unpaid Jobs: The new normal?"

 

Having heard my numerous reminders about the undocumented alien invasion via offshore internet workers, this insightful reader puts it this way:

"Read these quotes from one business owner -"People who work for free are far hungrier than anybody who has a salary, so they're going to outperform, they're going to try to please, they're going to be creative," and "From a cost savings perspective, to get something off the ground, it's huge. Especially if you're a small business" and finally "Ten years from now, this is going to be the norm..."   (Michigan and Wisconsin are leading the way - G)

I am so proud of our business community stepping up to the plate in this time of economic crisis to provide these fabulous opportunities to U.S. citizens."

Peachy plan.  Let's call it the "Freebulous job creation plan!"  Makes me proud too...Why, I'd even offer a toast to the boardroom geniuses behind this one, except that'd involve a trip to the local Chevron for something to properly toast with....

 

(For cold Bud?  Uh...er...sure....whatever...)  How soon the PTB forget their Dylan...

 

The Cars

No, not the rock & roll group, silly, I'm talking about the automobile, which was the driver of economic (read: corporate profiteering) for 100 plus years.  Being put aside by the EU from 2050 on.

 

This ought to be great fun to watch.  You see, in order for the New World Order types to pull this off, they have to figure out what to do with all those industries that are car-related.  Repair shops, battery makers, tires and reapirs, collision repair...hell, we could list them for days.

 

Like so much else out of crack-addled \supergovernment types, there's no explanation of where people are going to be employed in this brave newer world vision.  We do know that millions of additional people will become necessarily unemployed, however.

 

Which means - if I wrap my head around this stuff correctly  - is that people are going to lose a substantial bit of their freedom to travel about, and that more than ever, there will be a ratcheting up of government intrusion into people's lives.

 

What's laughable is that leadership of the EU doesn't seem bright enough to read their own financial statements (they're broke) while at the same time coming up with these Utopian dreamscapes which I can only attribute to bad meds.

 

If you're wondering why common folk are demonstrating in the streets of places like London and Greece here lately, it's pretty simple that thinking people all over the world are figuring out that just wrapping up a vision of the future in this flag  or that, and back it with a hype program like global warming is not what's going on, especially when the numbers don't add up.  The Association of British Drivers has at least figured that part out.

 

On the other hand, I suppose it doesn't matter:  I'll be 101 by then.  What city was that in Thailand, again?

 

Coping:  With Names and Naming

You may not be a regular reader of HipHopDX, but there's an interesting story there - as well of plenty of other places (Like BusinessWeek) - about a new Zack Greenburg book about rapper Jay-Z's rise to business success described in an "Empire State of Mind"  (Didn't see it on Amazon yet...)

 

What was interesting about the stories is how Jay-Z had some great success through simply naming products.

 

It seems to have started by getting a great list of artists to sign with Roc-a-fella Records (list) if I follow the story of Jay-Z's rise from the stories.  And from there goes to a fashion label, Rocawear with a catchy - and no, this ain't your daddy's penguin gold shirt - logo and 'tude.

 

Not everything Jay-Z has touched has turned to gold, but enough that the book may be worthy some study, but more by marketing students than business majors.

 

You see, that's the whole game, anymore: commanding revenue with brands and positioning.  Admittedly a bit of a strange topic for mulling with pancakes, but hugely important because it's the stuff that binds diverse personalities like Karl Rove on the (rabid) right to successful hipsters on the...er...whatever side that is...to the militant left.

 

Even if you never read a book on saales and marketing, the Jack Trout and Al Reis classic is under $12 bucks at Amazon under the title Positioning: The Battle for Your Mind.

 

Written (hardback) in the 1970's, I think it was, the book explains that when people make a purchasing decision (they can spent money or time, by the way) they are not just buying a 'thing' - they are buying a whole McGillah, a concept package and to do that, you need an all-encompassing message which either a) builds up your product or infers a competing product is not as good.

 

One of the classics was United Airlines early adoption of the "Fly the freindly skies" positioning statement.  Not that they came right out and said the other airlines weren't friendly, but theirs sure was.

 

People also don't buy point-to-point automobiles.  They buy cars which represent some expression of self-image and the Walter Mitty in all of us.  So, to some group of buyers, Ford's appealed to the 'horse' mindset with Mustangs, Pintos, and the Country Squires that owned such thing.  And brand confusion likely kept Dodge-Chrysler from scoring big with their Colt.  Ford, you see, owns the 'horse branding'. 

 

What did work for Dodge-Chrysler was other highly aggressive archetype trigger words like Charger, Challenger, Barracuda, Imperial, and so on.  Say, did I mention our Farm truck is a Ram 1500?

 

Presumably, as people outgrow their need to buy expressions of archetype, they come back to buying comfort and convenience as well as status.  Which is why Lexi (the presumed plural of Lexus) have numbers like Elaine's old ES-330, and why Infiniti's are similarly numbered, while class among the German driving machine class comes in either a 3, 5, or 7-series on the one hand, or something in the 900 series, like 914, 928, 924, 944, 911, 956 and so on.  Yeah, the 930 was fun for a while, but I didn't need that 'number' anymore.

 

Under it all, cars continue to compete with their faster two and four-place competition - the airplane.  Hence the fascination with 'aerodynamics" and the continual referencing to 'cockpits' and 'instrument clusters'.  Which, in an odd way seems to fit, as watching a free-revving 930 tach is a lot more fun than keeping airspeed, horizontal situation indicator, GPS, and so on, lined up correctly down to decision height.  If the 930 breaks, its usually survivable being one key difference.

 

The fun part of business (at least to me) has always been in this "How to take a company to market" problem.  Our "We go the extra mile for you" at Cayman Airways in the early 1980's was a precursor to the PSA "We go the extra smile for you" campaign which put silly (but highly memorable) grins on the front of their jets.  Great positioning.

---

Eventually, I need to get to a point here - if you'll bear with me for one more sec.  Just as there is a lot of archetype  stuff that goes on with mass marketing of concepts, so too is the cult of personality a 'biggie.'

 

I heard one of the rabid right bloviators refer a while back to the aircraft carrier Ronald Reagan as being something like the "Reaganus Rex", which was a very clever way of building up a republicorp icon, for people that don't recall that Reagan's presidency was arguably one that seriously started America's descent into financial irresponsibility.  To the degree, in fact, that Reagunus Rex's budget director David Stockman has been writing "Ooops, sorry about getting the trick-down stuff wrong' books and now advocates raising taxes to keep the country from going over the edge.

 

Reaganomic, a pretty well disproven fraud now, is still touted as a grand time in America by those who can't admit that laissez-faire means you now compete with internet workers in the third world who will work for far less than you.

 

Instead, the corporate-backed right is trying desperately to hold the job-jack and outsourcing paradigm together, in the sadly Depression-inducing belief that as long as corporations are unfettered with social responsibility (in the form of massive tax cuts, extension of eminent domain, and so forth) they will be able to run a hit and run campaign against any group that holds onto a plug nickel's worth of value that could be monetized in some manner and shoved onto a corporate balance sheet.

 

Which is why union-busting is so favored at the moment.  I see in Texas that people do very poorly at connecting the dots when a Texas prison operator brings in low-paid workers from Africa on work visas in order not to pay a prevailing wage, while at the same time cheering the anti-union diatribes from corporate-stooge governors up north. 

 

Perhaps they don't realize that the corporate agenda will come calling for public sector workers in Texas and every other state where a republicorp bagman can create a budget crisis de jour by by simply handing the phat cats sweet deals only dreamt of by working people and then declaring the it's someone else's fault that there's no money.  Sorry, seem to have digressed a bit.

---

So in addition to Regan the aircraft carrier, the Bush and the George Washington, we also notice that there are a bazillion schools in America that have been named after President Kennedy, try this little Google search for proof.

 

Another "What's in a name?" is the amazing number of Dr. Martin Luther King streets.  Google pops 526,000 hits on "Martin Luther King Avenue" along with a further 649,000 for "Martin Luther King Way",   another  3.69 million for "Martin Luther King Street", and a whopping 7.35 million for "Martin Luther King Blvd."

 

Is there a point to this discussion?  You bet!

 

Feast your eyes on this here new Kubota tractor delivered to a reader this week:

 

 

The picture came with the following note:

"At our farm we have the custom of giving names to our machinery, mostly to tell them apart (this is our 4th Kubota) but I believe it adds a little bit of humanity and certainly helps with preventive maintenance. This we have named Georgette in your honor. It is one thing to neglect Kubota #4, but I think with a name as Georgette the machine will get more TLC from our crew. So if that karma stuff (I am an engineer) does exist, you should be getting some positive stuff your way over the years. "

Hmmm... how to handle this.  I'm sending him back a note this morning:

Dear highly esteemed other reader:

 

I am touched by the honor of having your tractor annoited with a variant of the great name George - which derives from the Greek name for husbandman, farmer."

 

I would propose, however, that you may have been infected with a slightly case of political correctness disease in that Georgette  is of the feminine gender and I am not a member of that group which most HR folks define as a "protected class".

 

T'other thing is that "Georgette" is a less substantial archetype when it comes to weight.   I have to confess that my diet has stalled at the 203-205 range, but even so, I expect this grand new piece of machinery does outweigh me by just a bit, even now.

 

Would it be too large an intrusion to respectfully request a Christening with the more masculine gender and a moniker like "Super George"? 

 

Breaking a can of Budweiser over the radiator is what I've performed this naming ritual with in the past, since the tractor may then be used to flatten the can - much better than getting glass all over your field.

 

Respectfully, yada, yada, yada....

No, it's not an aircraft carrier with a corporate-backed cheering section, but WTF, it's a start.

 

Ham Radio Adventures

My son (KF7OCD) (which we're still debating whether Universe meant that as over (the) counter drugs or obsessive-compulsive disorder) finally got his ham station dialed in to the point we can not talk from there to here - about 1700 miles.

 

Had a nice chat with a 2-by-1 up in Flagstaff who dropped by...seems he and his dad kept a schedule on the air for years and it brought back memories.

 

Nothing more reassuring than having a unique and somewhat resilient way to keep in touch with family in other parts of the country that's independent of power, the Internet and the PSTN.

 

---

Monday March 28, 2011

Nasty Week, Depression 2 Proven

Odds are better than even that I will begin this week by going back to the short side of markets for a number of reasons, which can be enumerated simply this way:

• First, Kyodo News (English) is reporting radiation levels much higher than ever admitted with one reader calling it to our attention this way

  • "...1000 minisievert = 1sv = 100 rem100 rem per hour outside Fukishima 2 reactor. BREAKING NEWS: Radiation above 1,000 millisieverts found OUTSIDE No. 2 reactor: TEPCORadiation now found outside the Reactor (not just in the turbine building where the puddles are)... PIN THIS SHIT!"

  Yeah, well the chief time monk is already plenty depressed about what's coming (don't read this unless you are well fortified with pie).  It's dark and depressing even by our standards, although if there's any solace it's that linguistics tend to err on the grim side.  Even so...dark.....

• Secondly: we did not YET get an earthquake of any consequence on march 25-26th,  BUT a note from Clif Sunday says we're note out of the woods yet: "...the 28/29 time is when eq will hit..." so we wait patiently.  Remember, the predictive linguistics project is not like a wind-up clock where there's at least a chance of repeatable accuracy.  When linguistics are at work, time references are relative to other events, and one of these is the arrival of a linguistically imprecise Japan ('radioactive volcano')  fallout over the US.  While monitor reports are up in the US (below 'danger levels' we're reassured - however you want to go with that) the clean-up from the tsunami and nuclear leftovers in Japan continue to mount and it has occurred to the NY Times to hint around at wondering what's going to happen to all that radioactive water being splashed on cores & cooling ponds?  Oh, you know...under the rug, maybe?

• Not to put too fine a point on it, but this morning, as of 5:20 AM when I looked, the USGS World list of recent earthquakes was showing 21 events and of these, 11 were either US West Coast or Baja, which is where my bets are.  To put it another way, when 52% of earthquake activity in the world was either US West Coast (including Hawaii) or part of the Mexican extension down from Mexicali area south.  You can call the prediction wrong if you want, but I'm, stillo back that bet for 72-hours longer...if you've got a more reliable version of the 'rickety time machine' we must have missed your shared data...

• Next reason for the nasty week ahead is that at some point, members of the US congress might grow some nerve and begin to question what is quickly turning into an obviously economic war in Libya.  One the one hand, SecDef Robert Gates says Libya did not pose a direct threat to America's vital interests, and Hillary Clinton proved my contention that she's a globalist by supporting this "internationally sanction" war, which if unchallenged, means the US is not an autonomous country, but one the globalistas can bring to heel pretty much at will.  Not that this hasn't already been the case, it's just more 'in your face' nowadays.  Gone from days to weeks to months.  Bet on years?

• Next item down our Nasty Week checklist is the price of gold and silver which has been pushed off a cliff this morning and was down $16, or so three hours before stock markets opened.  My bet is we will see silver collapse $5 in one day and gold may drop to the $1,300 region over the next week as the big players manipulate a sound beat-down in order to try and gin up deliveries.  I'd have to consider it a buying opportunity, but you do your own thing and I'll do mine.

• Then we have Gary Lammert's expectation that the next leg of the 'albino swan' fractal mess should be apparent before Friday...

 

Proof of the Greater Depression

A bit of change this morning for an in-depth discussion.

 

My deflationist pal Jas Jain (a PhD in digital signal processing and whose work laid the foundation for current video compression algorithms) has been looking long and hard at economic data and believes he's got "smoking gun" evidence that we're now in the Second - or as he calls it - Greater - Depression.  In case you haven't figured this out for yourself, here's his report:

GDP Data Show That the US Economy Has Been In the Greater Depression     March 27,2011

The Genesis of My Forecast of the Greater Depression
I first came to the conclusion that the US economy would enter the Greater Depression in 1998. I came up with the term independently, but later learned that it had been used earlier by Doug Casey.  Here's something I wrote in 1998:

“May be you are on to something here… What will happen…? The Greater Depression? …The glory days of the US stock market may be over for good and in few decades the Chinese might assume the place of the supreme economic power in the world...."

In 1998, I also concluded that fraudulent financial practices, permitted by the US govt and enforcement agencies, e.g., SEC (Securing Entitlements for Crooks), have guaranteed an inefficient allocation of capital, on which the private US economy heavily depends, on top of the theft of the shareholders, would necessarily lead to a weak economy, long-term, and the US economy would enter a period of long-term growth far poorer than during the Great Depression, which was also caused by such practices that had preceded it, but at a lower degree of fraud. It also became obvious to me that a large number of organized group of economists, including Bernanke, have been lying about the true causes of the Great Depression—bad financial practices, especially related to lending.

I also concluded that, historically, the stock market has been a substitute debt market. Hence, I started to sign off some of my comments with: It is the debt, stupid! Not diligently and rigorously preventing the fraud since the mid-1990s had guaranteed outcome similar to, or worse than, the Great Depression. Now, after dozen years we have the data to prove that forecast. My forecast was based primarily on the widespread fraudulent financial practices, e.g., stock options, acquisitions, and related accounting practices, at the highest levels in corporate America and evidenced themselves in the so-called stock market, which I termed as the Scam Market, bubble. It wasn’t a bubble but a direct consequence of fraud. It continues to be the primary mechanism to defraud the wider public, including thru pension funds.

After the Tech “Bubble” Burst
The economy was officially in a recovery in late 2001, but a very weak recovery. Here are my comments on July 27, 2003:
THERE HAS BEEN NO ECONOMIC RECOVERY, INCLUDING DURING THE GREAT DEPRESSION, WHERE THE YoY NOMINAL GDP GROWTH RATE DID NOT REACH 5% WITHIN ONE YEAR OF THE RECOVERY. WE HAVE BEEN SUPPOSEDLY IN A RECOVERY FOR 20 MONTHS AND THE NOMINAL GDP SHOWS NO SIGNS OF GROWING AT 5%. A “weak recovery,” or “sub-par recovery” is like being half pregnant! If the weak recovery lasts long enough conditions would be as bad or worse than during a recession, or depression. For example, a 2% growth in real GDP over a period of 10 years would create conditions worse than the Great Depression! During the worst 12 years of the Great Depression, the real GDP growth averaged 2.83%! But, that was a full percentage point below the trend-line growth rate before the Great Depression.

At the minimum, the nominal GDP growth rate would have to go above 5% and stay there for at least one year for the trend to be revered. That means that the 10-year Note yield must get above 6% [upper limit, my forecast was that it will not get to 5.5%] for a year.

Don’t let the e-CON-meisters lure you into the con game of predicting bright future for the US economy. There are far more powerful secular trends (the attached graph [updated to the present, see Fig. 1] being just one piece of evidence) that point to the opposite. The recent low in the 10-year Treasury yield points to continuing weak growth in nominal GDP, a very bad sign for future employment, the single most important factor. A GDP growth rate above 3.4% that fizzles after one quarter is no good after a recession. And that is what has been happening.

Fig. 1

Continuation of the Fraudulent Financial Practices Became a Necessity
The weak economic “recovery” wasn’t going to get GW Bush re-elected. In November 2002, two years ahead of the next election, things were getting desperate and suggestions from trade groups (pool and spas!) that a housing boom could be just the shot-in-the-arm to lift the economy from its funk caught the imagination of the managers of the economy. What was needed was low rates and even lower standards of mortgage lending. Enters on the main stage a big actor—Ben Bernanke to save the economy from replay of the Great Depression (GD).

I wasted no time in concluding that the jig was up, i.e., we were already there, i.e., the conditions already existed. There is no way to prove the counter factual: Would GW Bush gotten re-elected without permitting the mortgage fraud, beginning in 2003 and continued thru 2007, and would Bernanke be appointed the Fed Chairman in 2006 (a place was held for Bernanke until Greenspan’s term expired for good)? My conclusion in 2006 was that the mortgage fraud was a necessity. Here is what I said on 09/04/2006 (See, or Peak Debt ):

Let us see, in 2003, Bernanke wanted to artificially boost the economy in preparation for the Bush re-election in late 2004 and his own future appointment. He had read articles by some self-serving economists in 2002, if it hadn't occurred to him, that low interest rates could boost housing and that may lead the economy out of the recession (it was already out of the recession, but didn't feel like a recovery with the employment falling). So, during the first half of 2003, Bernanke, as a Fed Governor, started to publicly talk about the deflation threat and how the Fed can always stop that by "printing money." Thus, the Fed, under Greenspan chairmanship back then, lowered the rates to "emergency" levels when the only real emergency was the Bush re-election. Greenspan was very happy to play along because his own reappointment in 2004 was contingent upon the economy visibly recovering.

All that the Greenspan-Bernanke did during 2003-2007 was to artificially boost the economy and literally borrow from the future employment and growth. The proof is in the pudding. What fraud giveth fraud taketh away!

Fig. 2
 

Fig. 2 (Exhibit A for the prosecution) shows miserable failure of policies to manipulate the economy since Reagan, lest we forget Reagan fired Volcker and gave America Maestro Greenspan and his successor GW Bush gave America Miracle-maker Bernanke. Sorry, no miracles. Unless, of course, we call defending fraudulent practices by authorities, and throwing wool in the eyes of the public, miracles. Here is what I concluded on 27 Feb 2006 (See):

I think that based on the above the FRS should stand for Fraudulent Reserve System. It has helped perpetrate biggest fraud on American People by making it easy for bankers and financiers to push debt on them.

The beginning points of the two graphs in Fig. 2 are growth rates during GD and the ending points are the current growth rates over similar periods now. The two graphs clearly show that we have already been in the Greater Depression. And you haven’t seen nothing yet. The Greater Depression would last for the rest of your life if you were over 50. The 10-year, 12-Year and 20-year growth rates would go negative at some point in time. No one has power to stop that.

The damage, institutionalizing fraudulent financial practices for such a long period, has already been done. The current form of this is allowing mortgage fraud (mortgages that no private person with his, or her, own money would make) by FHA, Fannie and Freddie, all in the name of saving the system. The current system not only doesn’t deserve to be saved it needs to be exterminated and replaced with relatively honest financial practices. Lloyd Blankfein is not doing God’s work. He is doing Satan’s work and people like him need to be locked in jail for the rest of their lives with no communication allowed. They are the carriers and facilitators of financial fraud.

Ten Years of Hoover & FDR, 1930-1940, Against Ten Year of GW Bush and Obama
Now let us look at some shocking facts about our recent hires for the top job.

Fig. 3
 

There are couple of key differences between the economy of 1920s and 1930s and the one in the recent decades. First, the economy was young and more active on the up side as well as the down side. One can also call this more volatile. Now the economy is old and not very agile. Second, there was lot less government intervention back then compared to now. On whose behalf does the govt mostly intervene?!

Looking at the above figure, isn’t the performance of the recent top guys pathetic with all their promises of jobs and growth? GW Bush even bragged about “strong economy” that his policies had created. And Obama has continued all of GW’ Bush’s economic policies and some more giveaways. During the decade of GD we had 10.7% higher economic growth with 2.4% lower population growth! See (my emphasis):

“The U.S. population over the past decade increased by 9.7 percent, surpassing the 300 million mark to reach 308.7 million, but at a rate slower than recent decades. Since 1900, only the 1930s [7.3%] experienced lower growth than the past decade, which saw growth similar to the 1980s (9.8 percent).”

Had the economic growth under the recent Presidents, GW Bush and Obama, both proven defenders of fraudsters, been the same as during 1930-40 we would have severe job shortages! Defending crooks’ interests is not consistent with creating jobs for honest people. Hoover was morally superior man than Obama and the same goes for FDR versus GW Bush. America has a serious problem of having morally bankrupt people at the top of the economy and the politics. Only they can survive the journey to the very top!

Some may say that we don’t have soup lines now. Food stamps are the modern version of the soup lines. Also, in terms of employment, as per my best guestimate (data is not available for 1930s), the employment rate for white men between 18-55, as a percentage of all white men in the age group, during the recent slump was not much different from the worst period in GD, 1932-33.

Why Are We In the Greater Depression?
Major depressions in the US, as the country became more industrialized and financialized, have been caused by bad financial practices that have ranged from loose to widespread fraud, which is where we have been for the past 16 years. And there is No Change since Obama.

Unless an overwhelming majority of crooks are removed from power and shut in jails, the US economy would continue to get worse, log-term, with few years of artificially inflated growth, at a very high cost, followed by deep recessions. We have a system that rewards bad people at the very top as well as a significant percent at the bottom. That lessens incentives for honest work. We are not Europe and we are not Japan, we are worse. China, Europe and Japan would fair better over the coming years. They have more responsible governments than ours in terms of looking out for the honest working men and women.

--Jas Jain, the Prophet of Doom and Gloom (email)

Now, to be sure, the argument is still open, since Jas research depends on a broad look at timeframes.  The approach could be debated, but he's a DSP whiz and it's his stock in trade to look at noisy data in sliding temporal windows.

 

As I explained in Sunday's Peoplenomics report, what becomes apparent is that successive Administrations in Washington have attempted to 'pull forward' the massive war boost provided by World War II in today's economy for launching a new war on the whatever pretext is convenient.

 

Without such stimuli, the economy would already be (more obviously) in the Greater Depression.

 

Not exactly mainstream stuff economists like to admit to.  But, given that this is likely to be a particularly nasty week on a number of fronts, seemed to me like the first thing to do with a cup of coffee would be to get a hard look at how the papering over efforts stack up compared to the last/previous great depression, since upon the very instant of mass public awareness, the global economic system could go into arrest mode.

 

We shall see, but this could be a particularly nasty week.

 

Did I mention gold has been down $18 already?

 

Now for some Humor

From the Bureau of Economic Analysis:

Personal income increased $38.1 billion, or 0.3 percent, and disposable personal income (DPI) increased $36.0 billion, or 0.3 percent, in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $69.1 billion, or 0.7 percent. In January, personal income increased $147.4 billion, or 1.2 percent, DPI increased $92.0 billion, or 0.8 percent, and PCE increased $29.5 billion, or 0.3 percent, based on revised estimates.

Real disposable income decreased 0.1 percent in February, in contrast to an increase of 0.5 percent in January. Real PCE increased 0.3 percent, in contrast to a decrease of less than 0.1 percent.

The January change in disposable personal income (DPI) was affected by two large special factors. Reduced employee contributions for government social insurance, which reflected provisions of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, boosted DPI in January by reducing the employee social security contribution rates (employee contributions for government social insurance are a subtraction in the calculation of personal income). This effect was partly offset by the expiration of the Making Work Pay provisions of the American Recovery and Reinvestment Act of 2009, which boosted personal current taxes and reduced DPI (personal current taxes are a subtraction in the calculation of DPI). Excluding these two special factors, which are discussed more fully below, DPI increased $36.0 billion, or 0.3 percent, in February, following an increase of $25.2 billion, or 0.2 percent, in January.

But here's the knee-slapper:

Personal saving -- DPI less personal outlays -- was $676.7 billion in February, compared with $710.5 billion in January. Personal saving as a percentage of disposable personal income was 5.8 percent in February, compared with 6.1 percent in January.

Yeah, sure, you bet'cha...  Wanna light me up one of those?

 

Coping:  Futility of Retirement

Oh, sure, it sounded good - Americans would put money into an inviolable Social Security Trust Fund and that money would ensure that every working American would get access to a decent retirement back-up plan.

 

But, a number of things have run Social Security into the ground, not the least of which is crooked politicians who are more interested in maintaining elective office than ensuring a high-integrity retirement plan.

 

A couple of nasty reminders popped up in the overnight emails here.  One from a reader who was incensed with the story that the pending "Medicare rise could mean no Social Security COLA" which he characterized this way:

Another example of giving with the left hand and taking with the right. Also, what is not mentioned is how the CPI (Consumer Price Index) is calculated. In 1993, under the Clinton administration, the costs of energy and food were dropped from the calculation. Therefore, the two most pressing expenses for retirees are not considered in the calculation of increases for S.S. benefits. Not that it might matter in the long run, since there is a good chance that the dollar will be as devalued as Confederate Money was after "The War" and used for the same purpose in the little house out back."

Admittedly, it was a typical "Slick Willie" kind of move, but it wasn't like he was alone in helping to hollow out Social Security.

 

As John Williams of Shadowstats.com noted in this October 2004 analysis...

"In particular, changes made in CPI methodology during the Clinton Administration understated inflation significantly, and, through a cumulative effect with earlier changes that began in the late-Carter and early Reagan Administrations have reduced current social security payments by roughly half from where they would have been otherwise."

And that fine tradition continues to this day, with  the government reneging on its commitment to fully funding the Social Security system by simply changing methodologies over time.

 

While it would be peachy if the problem could be laid solely on democorps, as many of the rabid right's radio ranters would misrepresent, the republicorps have does at least as much - and arguably more damage to the Social Security system with their own hijinks.

 

As luck often has it, multiple emails seem to pop up on a single topic, like our discussion of Social Security about the same time.  Here's an email that arrived shortly after the first...and relating the author's concern that inflation wasn't being measured right....

"Hello George:

Each year, my wife and I get those silly letters from Social Security that show how much money you "may" receive when you "retire".

One thing that I do like about these letters, is that it shows your income for your entire working life.

Since my wife and I entered the workforce in the late 1980's and early 1990's respectively, it seems that our income has not recovered from what it was in the year 2000, in spite of working part time jobs in addition to our normal work a week jobs.

Is our experience unusual, or a sad fact of how wages are not even remotely keeping up with inflation, regardless of what the CPI would indicate.

Well, yes, that's another problem, but that one has a lot more to do with the basic lack of mass technology change, a consequent lack of new employment opportunities, and the the daily invasion of millions of illegal workers who arrive (and leave) untaxed and not contributing to America - just taking from us - via the internet.

---

That we are in the Second/Greater Depression is pretty well characterized by one-time Reagan budget director David Stockman, who did a lecture this month for the Ludwig von Mises Institute with the predictive title "The end of sound money and the triumph of crony capitalism."

 

One quote in particular sums up where we are now: 

Like most other quantum leaps in statist intervention, the Wall Street bailout was justified as a last-resort exercise in breaking the rules to save the system. In the immortal words of George W. Bush, our most economically befuddled President since FDR, "I've abandoned free market principles in order to save the free market system."

When someone like Stockman hangs such a label on GWB, I consider it meaningful in an extensible way. To me, it's just one more reason that despite the leanings of the radio ranters, the fact is that a Reagan budget fellow has all but admitted that they 'eff'ed up' and he's trying to get things right now - by doing the very thing the rabid right seems determined to defend:  raising taxes on freeloading corporations.

---

We made a decision recently to join AARP - since I'm 62 and eligible for Social Security, not that I'm a huge fan of AARP, but they seem to be the only organization with enough size & momentum to have even a prayer of returning Social Security to a workable system.  I'm not much of a "joiner" but I have enough sense to see crooked government for what it is:  Making promises and their turning into back-sliding chiselers.

 

I'm on the verge of becoming a single-issue voter, because of it.  But my point of confusion is "Which issue?"

 

One of them might be integrity of Social Security and adjusting it for the real world, which it is not.  But, if I do that, then military retirement pay, too, would need to be similarly reformed.

 

But, if that happens, what about all the other taxpayer swindles - like building highways out of the Highways trust fund, or  federal and state gasoline taxes and then handing them over to private corporations many of which are offshore and provide no benefit to America other than a few low-paid minions while foreign royalty profits at America's expense.

 

But, if I do that, where does my outrage end?

---

Probably the biggest story out of Europe this morning is the one about the half-million people showing up to demonstrate against social spending cuts in the UK and the 200 people arrested after rioting which followed.

 

America is getting close to this kind of  crescendo event, since the economic displacements are now at the level where tearing up the social contract is now required to keep the ownership class whole.

 

Recent events in Michigan and Wisconsin were not (as portrayed by the rabid corporate shills) about corporate advantage.  In Wisconsin, we see plenty of evidence of willingness to quick jump to the corporate tune, but when it comes to the earned income trax credit for working poor, that somehow takes a lot longer.

 

One read opined in an email from - I forget it it was Michigan or Wisconsin - that "...we might as well have a King up here..."

 

Which brings me to this other email:

"Hey George,

I was talking with my brother, a fellow E-Texan (I am allowing you the status of Naturalized Texan - I, on the other hand am a Texas Ex-Pat) about selling elections on EBay.

We built on your great idea -- Let the Auction for President have a base price of, oh say 1/3 the national debt. This will limit the election to people who can afford it. Then when the election is won by either the King of Nebraska or the King of Washington, or oh hell, why not, the King of Australia, the proceeds (after EBay's cut of course) will go to pay down the National Debt. Give 'em a six year term and do it all over again. No limits to how many times they can serve -- If they can afford to buy the election let 'em have it, at least the debt would be paid down... I am sure there is a giant hole in this but it makes for an interesting fantasy...

Now a bad plan, except that's what we effectively already have, which is why coming up with a single focus for my rage against the machine is proving so difficult.

 

Normally, I'm just a lazy guy who would like to sit around and read all day.  running for office might be serious work, but the fellow who wrote the The Fifty Dollar and Up Underground House Book has already volunteered to be my campaign chairman if I run for office.

 

My proposed campaign chairman also sent me a copy of a book he'd written a good while back called The Hippy Survival Guide to Y2K.  I'm pleased to report to you - as a possible constituent in the future when I run for King - that I'm at last almost ready for Y2K.

 

While it may seem crazy to even consider voting for someone who is already running 10 years and four months behind the curve, consider the alternative.

 

Corporatism is really feudalism 2.0 and I figure the other guys are running on a program which traces its roots back more than 400-years earlier.

 

Better to be led by an honest man who's 10-years behind the curve than to follow more dishonest types who are 400-odd years late.

 

Email Madness

Love some of the ads that pop up.  Here's one asking "Is cloud computing right decision for you?" 

 

Hmmm...remind me to send them a note that I'm already in a cloud most of the time already.

 

Oh...and this is peachy:  An invitation to give money to the Kujawy Narrow Gauge Railways which is the longest still-existing narrow gauge railroad network in Poland.

 

Helpful though I'd like to be, I'm going to decline in order to send a ferw bucks to the local food bank.  But I will send then am email to suggest they put Warren Buffett on their emailing list.  A narrow gauge might be a nice add-on to his quickly expanding train layout which includes Burlington Northern and whatever...