Updated: Sunday January 25, 2004
"News with a twist of money..."
|
Updated: Sunday January 25, 2004 "News with a twist of money..."
|
   ![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif) |
Subscribe to Inside Report (Click Here) Join in discussions about economic matters by Clicking Here
A Personal Note
If you know of a company that is recruiting for an innovative sales and marketing professional (I possess an MBA in addition to proven success with turnaround situations),
please send me a note by clicking here. Thanks!Sunday Afternoon for Inside Report for Subscribers:
Are we setting up for a first-ever election year Crash?
With developments this week, we think the odds are increasing almost daily. This weekend we pull together the disparate pieces that include Dick Cheney's latest target, Kerry's sudden surge, how jobjacking of US jobs to overseas least-cost producers, and our exclusive Global Market Index all fit into a possible line up for a pre-election crash. That will be available to subscribers on Sunday afternoon about 2 PM Texas Time.
Because of all the effort going into getting our house rebuilt from the fire (during our move to Texas) we will for an interim period limit our weekend updates to subscribers only. If you would like information about subscribing, please click here. It's just $30/year.
Our next free public update will be available about 9 AM Eastern Time Monday, January 26. Click by then...
Friday
Interest Rate Fractures
If there's one story to keep an eye on for the next few months, it is the building pressure on the Bank of England to raise interest rates. First, the background: The British economy is not only doing well, it's doing too darned well: http://www.itv.com/news/1720994.html. This pop in the economy is leading to overheating and that means interest rates are sure to rise: http://news.scotsman.com/latest.cfm?id=2443229.
The web bots that are still running keep sending back warnings about a global housing collapse this summer - when house prices worldwide could begin to decline. And, out of Europe, we've pick up that some of the largest home builders are already laying off crews - or plan to do do - in anticipation of the change in sea state.
To us, it looks like the following sequence of events is coming. The British will raise rates to keep their economy from overheating. Too late, but this is how she goes. This in turn will begin to chill the British economy - and house building will slow. And, as interest rates increase, the net to homeowners will decline from sales, and house prices - net to seller - will decline. Some think by as much as a third.
Now, flip over to the US. Here, the increase in rates in Europe will work to keep "hot money" from pumping up the US market, and it will likely force the Treasury to call more bonds in the next month or two. You did pick up that the 30-year 9+% 2007 due date bonds were called by the Treasury last week, right? There are two sides to that story. The happy face/ happy talk version is that by calling the bond, the US government is doing the responsible thing to keep its interest payments on the national debt low. The flip side is that by calling the bonds, some US bond holders are beginning to wonder if there's more of this to come. If extended to the nth degree, such restructuring of big pieces of the Debtberg will become very bad for the bond market, and will increase the discounting of bonds because something needs to be added to account for calling of high rate bonds.
Whatever your personal take on it, bonds being called is good business and a bummer for investors because it's just one more risk element to consider. Worldwide, although the global index we publish for subscribers has continued to recover, the cost in human terms has been very high. For example, the latest figures show global unemployment is more than 180-million people: http://english.aljazeera.net/NR/exeres/434D5AC9-3E36-4084-B8CA-785122F40273.htm As we have noted before, the invention of corporations with more rights and fewer scrupples than people, is the most dangerous thing ever to happen. Think of what a different world we would have if there was zero inheritance and everyone started from the same stsarting blocks. I know, if a frog had wings, it wouldn't bump its butt, either. Still...
Of course with corporations making more money - and human's getting the short shrift - UN Secretary General Kofi Annan says the law of the jungle is not good for the planet: http://wireservice.wired.com/wired/story.asp?section=Breaking&storyId=816608. And being backed into a corner by the high spending on Homeland Security, the Bush administration is about to unveil a budget with a measley 1% increase for most operations, except of course for the Homeland Security agency that still hasn't fixed our leaking border with Canada and the free-for-all which some still errantly call the Mexican "border." http://www.washtimes.com/national/20040122-113950-1435r.htm But hey, give them all the money the govercrats want for pet projects. You want funding? Use the word "security."
Let me tell you horrible truth of the Bush budget. A 1% increase in a budget when there is a 3.5% (or more likely 5%) underlying inflation rate means the amount of goods and services of government will decline anywhere from 2.5 to 4%. If the increase in the budget is 1%, back out inflation and you get a net loss.
Hear Rover? Here Rover!
Hear Rover? http://news.bbc.co.uk/1/hi/sci/tech/3421981.stm Here Rover! More water evidence. http://ap.tbo.com/ap/breaking/MGAVZKABSPD.html
Bird Flu
We thought Thailand;s most famous export was "stick" - but lately it's been birds. Chickens to be precise. And some sick ones with bird flu. That would be serious enough for a $1.3 billion industry, but when bird flu jumps species to humans, well, that's a real bummer: http://news.bbc.co.uk/1/hi/world/asia-pacific/3422035.stm.
Gas Project Going
Running out of gas? Yup. Going further to get it means going to Prudhoe Bay fields: http://biz.yahoo.com/prnews/040122/lath107_1.html. Go look up Michael Simmons' latest on the policy boners of the power industry. What he seems to say, in effect, is that while we've got lots of coal, most of the recently built electricity plants built were designed to be gas-fired. And we're running out of gas first....Dumb.
Pain Reliever Galls Livers
Danger in the pills says the FDA about a popular class of pain relievers: http://ap.tbo.com/ap/breaking/MGAMKTF8SPD.html.
Speaking of pain relievers, I have a new theory about why aspirin is so effective at treating people for heart attacks. Here's the deal: One of my colleagues has this million dollar class turbo prop aircraft. Using a new gadget, he noticed that when he was doing long flights at high altitudes, his blood oxygen level was low enough to take the "edge" off his normally lightning quick reaction times. Not the kind of thing you want happening during a complex IFR descent into bad weather. The solution he found was to take an aspirin an hour or two before flying - and that seems to keep the blood oxygen levels significantly higher! OK, so along comes the non-medical George asking "Is the positive effect of aspirin on heart attack patients due to a) blood thinning or b) the increase in blood oxygen levels? Something you might want to look into when you're off doing medical research...send us abstracts and links?
Red Sea Can be Parted
Not that a strict scripturist would need convincing, but now science says the flight of the Israelites by parting of the Red Sea could have really happened as described: http://washingtontimes.com/upi-breaking/20040121-080423-3978r.htm.
This week Inside Report explores Economic Patriotism. For Subscription Info, click here.
Wild Garlic
This week has been particularly busy - make a note not to have a house fire while you're transitioning between gigs, OK? But I've been pleased to find that on our property we've got patches of wild Texas Onions cropping up all over the place. Who would have thought?
They are not really an onion. They are more like a cross between a garlic and a green onion - and one of these days, we will get a call into the local County Extension Agent to see if these things have any economic value. But wow - are they ever good. We must have almost an acre of the things, and our neighbors who have been enjoying the wild whatever-they-ares assure me they really grow like weeds.
I'm planning to have my award winning chef daughter work up a special recipe or two - might be able to make a few bucks peddling wild garlic to the extremely rich in taste!
I'll try to get some of the fire pictures up this weekend. We've been working 10-12 hours a day for a couple of weeks now to get basic plumbing working. We've also arranged to rent a neighbor's guest house till we sort out what comes next. The insurance company's adjust has recommended totalling the structure, and once that happens, and we have the place free & clear, then I'll get an architect involved. Elaine has spied some inexpensive steel buildings, but one step at a time.
You might want to check your home insurance policy: Ours only pays for our hotel if the home is rebuilt - and because the company is recommending it be totaled, the hotel bill is coming out of my pocket, so I've been highly motivated to fix up plumbing (shower, crapper, and hot water) to save the $300/week tab. What an experience! If you ever need the underside of a seriously fire-damaged house cleared of hundreds of cubic feet of itchyglas insulation, remove the old plumbing system, and replumb temporary repairs, don't call us. You would not be able to afford it.
Thursday
Kodak's Digital Disaster
You can skip the hard work behind an MBA sometimes by just looking at the world. Kodak announced today that it's laying off more than 20% of its workforce over the next several years. It's largely due to the emergence of digital cameras. Read the article at http://quote.bloomberg.com/apps/news?pid=71000001&refer=top_world_news&sid=ac9_qJXkqSes and you'll see that Kodak is now looking at areas like healthcare for expansion in the future. The lesson I promised? Two American companies, Kodak and Polaroid, both had the smarts to see what was fundamentally changing with the advent of digital photography. Either one could have ruled the digital world is someone in corporation decision-making had followed a simply rule of business: Create your own competion. Yes Kodak got into the digital game, but not to the extent of others including Canon and Fuji. Our little $266 dollar 2+ megapixel camera holds 400+ pictures and was made by a film company - Fuji. The point, grasshopper, is if you don't replace your own products, someone will do it for you.
Ford meantime has good news and bad in their report. http://ap.tbo.com/ap/breaking/MGAT7E6VQPD.html But while one of my relatives tells me he more than doubled his investment by purchasing gobs of Ford a year ago, I still can't get excited about companies that don't hit the 70 MPG range which will come eventually as the world's recoverable energy declines. Still, Ford's a solid company - for now.
Sri Lanka's Oil?
Yeah, look for the US to take a sudden interest in Sri Lanka (off the coast of India) now that the country has rounded up some Arab world financing to search for oil: http://english.aljazeera.net/NR/exeres/2F44542E-2B0D-44B8-84CC-636C496A48DE.htm. No, it's not a lot, but it's enough to get them noticed.
Divvying Up the World
The World Economic Forum continues: http://english.aljazeera.net/NR/exeres/84B1F26F-5BC1-445C-A435-1BFE53EA6E9F.htm. Governor Paul Bremer didn't show...no reasons given, but we expect the continued violence against occupation forces was the reason.
In Afghanistan, meantime, the Taliban are threatening more violence: http://english.aljazeera.net/NR/exeres/31216CB5-1252-41B1-9B35-AA1F024B66F2.htm.
Bonesman to Win Vermont
As we continue tracking how the Skull & Bones fraternity of Yale is taking over the world, we note that Bonesman Kerry is now the 10-point favorite on the "democratic side" of the Bonesmen's election: http://news.bostonherald.com/national/national.bg?articleid=596.
Custom Bugs
The same kind of scientific thinking which brought us the mixed blessing and curse of genetically modified food, comes word today of plans to apply DNA technology to developing new insects. Not nanoengineering, but interesting to say the least: http://www.washingtonpost.com/ac2/wp-dyn/A36943-2004Jan21?language=printer I don't pretend to give scientific advice very often, but here are a few specialty bugs I'd like to see:
Wednesday
Datagate
It's with passing interest that we observe the fallout is beginning to Northwest Airlines reported release of confidential passenger information without permission of its passengers. It comes in the form of a couple of lawsuits: http://ap.tbo.com/ap/breaking/MGA1VGTFPPD.html. One is a class action on behalf of passengers while the other seeks to find out if other airlines did the same thing. I'd bet almost anything they did, but short of a court order, who's going to admit it?
State of the Candidate
The State of the Union was a yawner. We already declared Bush the winner of this year's election - about seven months ago. He dropped Axis of Evil and has decided to take on same sex marriages and other far right objectives. Reaction? Try: http://www.cnn.com/2004/WORLD/europe/01/21/bush.analysis/index.html or http://ap.tbo.com/ap/breaking/MGA2LA8BPPD.html. But the real story, as usual, is not what he said, but what he didn't say. While pulling out the rah-rah about the economy he failed to mention the more than 2.3 million jobs that have evaporated on his watch, or the millions of jobs which have been jobjacked to least cost corporatist slave countries. But hey, you don't raise $200 million for your "campaign warchest" by arguing with Big Money, right?
Thirsty China
China has been, as we noted, spending its surplus of WalBucks as fast as it can buying up energy and resources. A good summary of China's demand for oil at http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1073281160569&p=1012571727088.
Dead WMD Expert on TV Tonight
Posthumously, Dr. David Kelly is on British TV tonight. Reportedly he thinks the Iraqis had WMD's available on short notice. http://www.itv.com/news/1268047.html But I doubt the TV show will put much to rest. The question is still whether he was killed for what he knew or whether he committed suicide. Jury is still out.
Lie Detector Glasses?
Sounds like something out of Dick Tracy, but here comes eyeware with built in lie detector capability: http://www.eetimes.com/story/OEG20040116S0050. I can see the new specialty coming out of med schools soon to support the fledgling audi-optic engineering business... Of course we wouldn't be able to watch a political speech with these critters on.
Tuesday
Bonesmen Election?
With the win of John Kerry in the Iowa caucuses last night, http://apnews.myway.com/article/20040120/D806AMI02.html, the big story - and one you won't hear on parrot TV - is that John Kerry versus George Bush sets up an election where the ultra-elite Skull & Bones fraternity of Yale simply can't lose. Kerry and Bush are the same person, in a sense. Here's a listing of articles about this classic tweedle dee or tweedle dum choice being offered voters: http://www.google.com/search?hl=en&ie=UTF-8&oe=UTF-8&q=%2B%22john+kerry%22+%2B%22skull+and+bones%22 and apparently, Skull & Bones types were involved in Bill Clinton's election: http://www.google.com/search?hl=en&lr=&ie=UTF-8&oe=UTF-8&q=%2B%22bill+clinton%22+%2B%22skull+and+bones%22
Not that there is anything bad about such a fraternity of the rich and powerful. It's just that I would have thought we could find suitable candidates for the highest office in the land from somewhere other than Yale's secretive fraternity. Yah think?
Soft Targets: Coincidences?
Whenever I see two similar stories popping at the same time, I begin to ask questions. I'll show you what I mean. Overnight, there was a natural gas complex explosion in Algeria: http://ap.tbo.com/ap/breaking/MGAPEESUNPD.html. Then I read a story about a chemical company suffering explosions in Indonesia: http://ap.tbo.com/ap/breaking/MGAFF38VNPD.html. Coincidences? Let me see: Algeria has what, militant Islamic insurgency? Indonesia has a split between the militants and the moderates. You don't suppose this would be an al Qaida deal, do you?
Lotto in Tennessee
Tennessee has become the latest state to extort revenue from hapless gamblers who think they have a chance of winning millions: http://ap.tbo.com/ap/breaking/MGAS57FPNPD.html. Yeah, I will buy a couple of tickets for the next drawing here in Texas - hope springs eternal, I guess. My rational mind says the odds are north of 1 in 10-million or so, but the irrational mind says "Someone will win it, and it's only a buck for Heaven's sake..."
Chavez Support
Notice the army has lined up to support president Chavez in Venezuela: http://news.bbc.co.uk/1/hi/world/americas/3412327.stm
UN to Iraq?
The dream of the administration's neoCONs is to find some way to get out of Iraq in order to wash off the stigma of the situation before elections. So when you read about the UN considering going into Iraq such as the piece at http://news.bbc.co.uk/1/hi/world/middle_east/3411345.stm you should really read "Bush hopes to dump mess on UN, announce withdrawal before election, etc.
Pot Overdose?
The Brits are making a big deal about a pot overdose: http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2004/01/20/ncann20.xml&sSheet=/portal/2004/01/20/ixportal.html but the real story is that if the same standard were applied to alcohol, it would be illegal, too. The reason alcohol gets a free ride and pot doesn't is that you can grow your own pot, but with institutionalized alcholism, big corps make money and government gets a cut in taxes to look the other way.
Speaking of Taxes! Check this out!
John Crudele has a killer piece in the NY Post this morning about the real reason Paul O'Neill is such a threat to the Bush admin. He was blowing the whistle on how government officials would go to jail if they were held to the same (accrual) standards of accounting which private industry is held to. Go read his story at http://www.nypost.com/business/16159.htm. Wouldn't it be great if Oxley-Sarbanes were applied to government, huh?
Domain Name Disputes
There's a fun story at http://www.nypost.com/business/16147.htm about a young man named Mike Rowe, who set up a personal web site at MikeRoweSoft.com and got guess which larger-than-average software company upset.
I mention this because a few readers have asked, "What ever happened to your book publishing idea?" Well, it turned out that the name I had chosen was deemed perilously close to a name used by a large corporation (Vivendi) for a line of educational products. They contacted me, offered to buy the domain, and knowing I couldn't afford a domain name fight, I gave it up. I'm still waiting for their check, by the way. But it brings us back to the whole notion of branding, trade dress, and the like.
If I were to offer anyone advice, it's this: Sell the domain and get reimbursed for actual costs. Then invent a new name like the drug companies do. For example, if you're looiking for a brandable name, make up something like Taraquint or Kibbelstat. It will be unique and you won't run afoul legal threatslingers.
Speaking of which, I have a concept for a new web site called Threatslingers.com to chronicle the adventures of attorneys who use letters with words like "injure our trade name and reputation" and "unspecified damages." They even use words like "reasonable attorney fees" which is something I've never heard adequately explained. If I drive a 4-year old car, I don't think paying for an attorney's new Mercedes and home bigger than mine is "reasonable." Why www.threatslingers.com could even start a petition to limit attorney's incomes to no more than four times the national average on the theory that high legal fees are a barrier to equal protection (which any damn fool can see is true, right?).
So there it is - a web site idea which would almost certainly become a giant and generate huge income for you. One catch. If you do it, be sure to send me 3% of the revenue, our you'll be hearing from my attorney who will seek unspecified damages and reasonable attorneys fees....
Monday
Iraq: Stalling Elections
According to reports this morning, more than 100,000 people marched in Iraq today demanding elections - now - not when the US occupation forces get around to it, perhaps not till late this year. Coverage at http://ap.tbo.com/ap/breaking/MGADASHKMPD.html and http://english.aljazeera.net/NR/exeres/E282B862-5CA6-462F-B5DC-AFA9ACF8D43F.htm is worth reading because it brings us to an interesting point: If we went into Iraq with the idea of installing democracy (I think this was reason #3 after "they have WMD's" and "We must maintain regional stability by replacing Saddam") why aren't we holding elections that the people are demanding? You don't suppose they are being stalled in order for us to put in a system of governance that will hold to the corporatists will of the West do you? To recap: They march, we shoot, they bomb, we stall. Let's call this process "nation building."
Tony's Bubble
Printing money is such a fun way to pump up the economy here that we often forget that other countries can play the same game. Take England, for example, please: http://english.aljazeera.net/NR/exeres/0AD1CB43-069F-40E6-A825-2CB26A45E86D.htm.
No More Time for 9/11 Study
The Bush administration and others are indicating the 9/11 study panel won't get any additional time to complete their work: http://www.washingtonpost.com/ac2/wp-dyn/A28025-2004Jan18?language=printer. Victim families are worried about conflicts of interest because so many of the commission members have government ties.
Space Seen as Battleground
Interesting article at http://news.myway.com/top/article/id/379850|top|01-18-2004::11:27|reuters.html about how the US is viewing space as the ultimate high ground for any future conflict. Of course, what's ludicrous about the story is that it's a battle ground against some un-named enemy while admitting we're in a race with China to get a base on the moon. So here's a reality check: If you read between the lines, you'll see that the un-named enemy is probably China. But the policy boondoggle is that we rely on China for all kinds of manufacturing. In event of a war, China has something we don't: factories. So as the biggest debtor nation in the history of the world, we would what, write someone a check for a military? This is a perfect illustration of how policy gets disconnected from reality. Without factories and skilled craftspeople to run them, owning the high ground is a joke. If there's one thing to learn from Osama bin Hidin it's that technology is not the be all end all.
Memory Pill?
New reserach has identified a chemical that may increase your brain's ability to store information in memory: http://news.independent.co.uk/world/science_medical/story.jsp?story=482567 Not that we will have a pill overnight from the research, but it's now out there are a future development. And it's troubling.
As a society, we tend to measure how "smart" people are by how well they can parrot back specific pieces of information in an IQ test. Put simply, when we measure intelligence, we are really measuring memory and recall. We don't generally measure how well information can be synthesized. True, some spatial relations tests look at that, but when you're presented with a picture of a porcelain vase and are asked to choose the source country from among Peru, China, or France, what's being tested is recall.
Psychologists seem to hold that the more information you can recall, the better the quality of decisions. But as we have learned in computers, having a tremendous amount of memory isn't the be all, end all. Eventually, the software is important. How we frame our worldview is at least as important as the number of "memories" we can stuff into our heads.
Sunday
New Word: Compstapo
This week we're adding another word to our "New Economic Reality Dictionary." The word is Compstapo and we're adding it upon the revelation in the Washington Post today that Northwest Airlines has turned over confidential information about millions of passengers for a "secret U.S. government air security project." http://www.washingtonpost.com/ac2/wp-dyn/A26037-2004Jan17?language=printer.
Northwest is not the first. JetBlue admitted it turned over records to a defense contractor, but they also apologized to its customers.
Let's see if we can see where such Compstapo projects fit in the great scheme of "protecting" us from terrorism, shall we?
In case you're not aware of it, there are more than 2-thousand results for the Google search ["create a new identity" +order] where you can find out exactly how to legally morph into someone else. http://www.google.com/search?hl=en&ie=UTF-8&oe=UTF-8&q=%22create+a+new+identity%22+%2Border.
To the even marginally competent, all the efforts of computer surveillance is pretty much a sham. Give an enemy of America over 2-years to build a "credit trail" and a nice Anglo name like Fred White to replace something Arabic sounding, and what do you have? Holes.
But check out a copy of "The Anarchist's Cookbook" (if you can even find a copy) and your local library might turn you in. Let me ask you, would any Jihad screaming fanatic be checking out the Anarchist's Cookbook in English from the local library in the USA? Not when they can watch the Arabic version videotapes that are readily available outside the US.
Do these govercrats think the American people are that stupid? Of course, judging by the lack of concern, they might well be...
Supreme Court Conflict of Interest!
Three weeks ago, the U.S. Supreme Court agreed to take up Vice President Oil's fumble of the administration's energy task force. Then we find out in the Boston Globe today that Justice Antonin Scalia and Veep Oil went duck hunting together in Louisiana. As you read the story at http://www.boston.com/news/nation/washington/articles/2004/01/18/scalia_trip_with_cheney_raises_eyebrows/ ask yourself the obvious: "Isn't this the same court that appointed you-know-who president?"
10-months in Iraq = 4-years in 'Nam?
Putting the pencil to it, the Washington Post's R. Jeffrey Smith notes that with 500 military dead in 10-months of Iraq that we'
ve lost as many brave soldiers as we did in the first four years of Vietnam: http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/01/18/MNGB44CJKR1.DTL&type=printable.
Meantime, 18 people have died in the latest bombing attack in Baghdad: http://apnews.myway.com/article/20040118/D80593SG1.html There's a good article on the strategic problems of rebuilding Iraq at http://news.bbc.co.uk/1/hi/world/middle_east/3407613.stm
Super Bowl Stats
While the average sports nut (which I'm not) looks forward to Super Bowl Sunday, I don't know why, but I was oddly pleased to read that Super Bowl Sunday will see 43.5 million pounds of avocados devoured by Americans that day: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/01/18/BUGH64C2K91.DTL&type=business
Beer drinking accounts for about 67% of the alcohol consumed in the US - and as a result, driving on Super Bowl Sunday is more dangerous from a drinking and driving perspective than is New Year's Eve. Hard to believe, but that's what the figures suggest. 80% of beer consumed is by men, too, which accounts for beer bellies one would reckon.
News from Elliott Wave International
On to Our Charts!
Write when you get rich - or sooner if you feel like it.
All contents (c) 1998-2003 by George A. Ure, MBA, except authors as linked or noted
