Ukraine Flashpoint: Someone’s Securing Airports

Background:  I have been warning for weeks now that the situation in Ukraine could end badly for both sides, US/West/EU and the Russians.  The reason I cited is that Russia has considered Ukraine it’s property for more than 300-years and despite cutting it some autonomous slack in 1954 by letting it form some local governance, the ties to Russia were firmly held.

The US however (shades of Benghazi), has an acute ability to misjudge the obvious.  This is especially clear this week in stories like “The Endless Benghazi Cover-Up” in the Wall St. Journal op-ed by Karl Rove.  Yeah, I know…Depends who you want to listen to, I suppose.  But it would be intensely interesting to here what retired General Carter Ham has to say about Ukraine…

From the Western perspective the Crimea, being Russia’s warm water, year-round port, it would seem a simple task to foment uprising in Ukraine and (bonus time) pick up Sevastopol and pick off the Russian port facilities.  Their ability to project power into Africa and the Middle East would suffer greatly.

You’ll recall I suggested that Russia would NOT take this laying down and with the arrival of unmarked gunmen in the Crimea, and this morning’s report of “unmarked soldiers” [possibly Russian] securing airports in the Crimea, we are convinced our paradigm framing been right on.  Still, a few reports call the soldiers “unknown” (as in this USA Today report) so time will tell who has put “first boots” on the ground; Ukraine, US/EU, or Russia.

Breaking Today:  That said, the Ukrainians are accusing Russia of an ‘armed invasion’ following the airport takeovers.  Game on for WW-III?  War is a historical tool to cover-up economic calamity and misfeasance….

The Russians are reassuring the US that their “readiness drills” are not linked to Ukraine, but you’d have to be an idiot not to draw that conclusion. Action speaks louder than….

Looking Ahead:  The next move, if things stick to our scripting, should be the US calling for emergency talks and perhaps a presidential news conference along the lines of the Cuban Missile Crisis back in ‘62.

This will play exactly as the Russians have been planning.  They have been holding preparatory “readiness exercises” but another way of thinking of this is as “rehearsals” for a real, overwhelming, show of force in coming weeks.  They need two more weeks to move up “overwhelming” resources to the front.

In the meantime, Vlad Putin is promising aid for Ukraine, but is also backing the ousted president who is due in a Russia town near the Crimea for a press conference today.

For now, we don’t expect the markets to tank just yet.  However, since “cash is a position” I may lighten up on a long position later today despite the fact the markets have touched some marginal new highs.  If the market closes down, say 50-Dow points, and there’s a decline in the S&P, we could simply put in a “double top” formation and those can be followed by violent down moves.  That could depend on the Ukraine (and Venezuela) news flows next week.

Alternatively:  On the other hand, a peaceful resolution to present events, however unlikely it may seem, could light the markets off like a skyrocket…so patience and judgment are key.  Is war good for markets?  Well, of course….and they cover up so much other stuff….

US Spillover: Flash Mobs to Revolutions/Digilutions

Background:  As I expressed in yesterday’s column, there is a fine line between the digital technology that allows for a gangstah posse in Chicago to form a “flash mob” at a local merchant and the scaled up kind of thing that has gone on in Ukraine, a super-sized flash mob to take a country.  But this has also been played as part of Arab Spring, and may also be in place in Venezuela, as well.

Today:  Could it spill over into America?  Well, reports one reader in Vancouver, Washington, maybe it’s already spilling…

Since you are a native of NW you are probably aware of the demographic makeup down here in Vancouver,  WA with a huge Russian and Ukrainian makeup, they are not overly fond of each other but lately things have been real bad, I work with 4 Ukrainians and 2 Russians and have been really offended at comments made by some Russians such as “Ukrainians are cowards” “They are sign-toting monkeys” the same one who called them monkeys moments later called them “Slavic brothers” so the relationship is a bit bi-polar but overall I get the impression the Russians think of Ukraine as belonging to them and Ukrainians as second class compared to them, very similar to how the 19th century English viewed us Scots.

I have no doubt EU is thrilled about this with Ukraine being one of the worlds three great bread baskets and a industrially a giant, 6th largest arms exporter, technologically advanced enough to launch multiple satellites yearly and the largest army wholly within Europe, its a real prize, but 78% of the country is ethnically Ukrainian and they have a long painful history with Russia (and with corruption) and they want a fresh start, considering how bad Yanukovich was eventually they would have rebelled over some other spark if not the EU.

Outlook:  If our tracking continues accurate, we may see a simmering for 2-4 weeks (new market highs in the US markets in the meantime) and then an overwhelming Russian response to ensure they don’t lose their warm water port that allows them to project naval power into the Middle East.

Or, the escalation path could be much quicker, which is why an astute investor will need to weigh that three-way decision fork:  short, cash, or stay long?

GDP Out, Up

New Gross Domestic Product numbers may help, but only a bit.  Just out today from the Bureau of Economic Analysis is this:

“Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.4 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter), according to the “second” estimate released by the Bureau of Economic Analysis.

In the third quarter, real GDP increased 4.1 percent. The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month.

In the advance estimate, the increase in real GDP was 3.2 percent. With this second estimate for the fourth quarter, an increase in personal consumption expenditures (PCE) was smaller than previously estimated (see “Revisions” on page 3).

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Coping: With Ukraine War Woo-Woo

Every so often our www.nostracodeus.com project comes up with something that is truly amazing.  And sometimes we get more than a slight hint of the future in the process. And readers there contribute some amazing emails…and that gets me to the point:

Suppose for a moment that I told you that a prediction that the “Third World War to begin during Winter Games in 2014” was made by astrologers, shamans and parapsychologists in Russia ways back in the spring of 2011three years ago!.

Well, it’s true, the prediction was, in fact, made.  You can find it in Pravda’s English language archives here.

No kidding!  And, if you read the story closely, you’ll find today is one of the “hot days.” 

WoWW:  A Case of “Future-Vision”

This report on happenings in the World of Woo-Woo is just flat amazing!

Dear George,

As my son and I were leaving our Karate school last week I glanced into the window of the Consignment store next door and noticed it was empty.  I commented to my son that they must have gone out of business.  He replied, “What are you talking about?”  I looked again and the store was full of woman’s clothing and a window display of pink garments for Valentine’s day.  “Never mind.  It looked like it was empty for a minute.”  I could have sworn it was.

I went to karate class tonight without my son and this time when I looked into the store it was empty.  All that was left was a glass counter and a “Closed” sign on the door.  I called my son and asked him if he remembered me talking about the store being closed and it wasn’t.  “Yeah, why?”  “Because tonight it was empty for real-they went out of business.” 

My son and I both marveled at the weirdness of it all and I’m convinced that I saw a week into the future when I believed the store was empty last week.
Love your column and especially the woo-woo stories.

Take care,  Rebecca  Tampa Bay Florida

I’d be really interested to collect any additional facts about the previous trip.  Any odd clouds in the sky, any unusual foods?  How about music or….anything else about that visit which had an odd vibe to it?

SERIOUS Personal WoWW

WoWW – The World of Woo-Woo – is something we get only smatterings of now and then.  Most of our reports come to us second hand.  Someone puts down a set of keys – and said key’s promptly disappear –  only to reappear some weeks later in a different place.  Or like the store closing (in advance) in the previous story. 

It’s like when a reader sits a stapler down on the desk and an hour later it has gone missing.  It remains missing for several WEEKS and then –out of the blue – shows up somewhere that has been previously searched (to no avail).  Yet there the damn object (of the search) is.  It’s in complete defiance of logic.

So on to this morning’s case report is special because it is first-hand.

Background: A number of weeks – maybe a month – back Elaine asked me “Have you seen my little exercise ball?”

Years back, when I was at Campus Management down in Boca Raton, we gave out these little fabric-covered exercise balls with the company logo on them at one of our user conferences.  Hugely popular since the users were able to use them to work out the stress from hours on a keyboard.  Carpal tunnel and all that, right?  Elaine loves hers and has been squeezing it since about 2003…Fabric on it is all stretch out, logo is mostly gone, but she loved it.  When it went missing, she went into action.

She had searched the house high and low.  Ripped cushions off furniture, moved throw rugs, moved furniture, vacuumed, and on and on…Not just once around, either.

So for the last several weeks almost daily I’ve been answering question: “No, I haven’t seen it….but it will be along one of these days…because that’s how this WoWW stuff seems to work…”

Secretly, of course, I didn’t believe it for an instant.  The senior scientist in me scoffed. “Reality isn’t really like that,” it kept insisting.

Besides, three days ago she bought a brand new exercise ball.  Bigger than the little one she loved, but that’s what was available in the local Wal-Mart.  I figured the little one was gone, kaput, end of tale.  Odd for it to disappear in the house, but oh well….got other fish to fry.

Until 10:47 AM Thursday when Elaine stormed into my office and triumphantly announced “Here it is!”

“Here WHAT is?” about the time my eye caught a small black ball inbound at 21 miles an hour in a low, under-hand toss from the smiling blonde lady… 

“It was just sitting there!  About 4-inches out from the middle of the couch….where would would have seen it a million times… had it been there…”

And of course, she was exactly right because I’d watch with some amusement from my recliner as she had torn the living room apart three or four times over; down on her knees with a big LED flashlight looking every damned where.  Inspector Gadget would have been proud of her search efforts.  It just plain wasn’t there and I would have seen it had it been.

I had felt around the couch, too.  Between and under cushions, down on the floor…nope, not there.  But now it’s back and I’m left wondering to figure out what it all means…

The living room floor has also been vacuumed twice a week, so the odds of it missing the vacuum almost a dozen times is right at zero, as far as I’m concerned.

We chatted about it…and then she confessed that was enough talk.  To her brain, this was in the same league as that teleportation event I told you about a few months back.  The one where she went to sleep in her recliner in the living room and woke up in bed with the TV still on….and that still totally freaks her out.  Now the ball case.  Can you say “Odd?”

In many of these “disappearing objects that reappear cases” the person has some attachment to the object and just as they move past the attachment – BANG!  It’s back.

Maybe that God’s (or Universe, or whatever’s) way of teaching us something about attachment.

Or, maybe reality really is a Swiss cheesy place and we don’t understand the half of how it works; not really.

And maybe the joke’s on us:  We may be smart enough to materialize a picture live on a smartphone, but how come we can materialize the means to make the monthly payments for it?  That kind of thing.

This is the kind of stuff I mull over when I’m out working in the shop or around the house on weekends.

If I ever get a solid insight, be sure and read Monday columns.But “seriously odd” doesn’t even begin to cover it.  Profoundly contrary to the way things should work, is more like it.

Why I’m Not a Lawyer

An email from reader Richard points out the flaws in my thinking (or at least some of them)…

George,

I believe that your assessment of the veto by Gov. Brewer of S.B. 1062 is as misguided as the propaganda put out by the LBGT community.

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Worms of Inflation

OK, the big worry on Wall St. is that inflation is going to come along and blow over the first domino.

In case you haven’t followed UrbanSurvival often (you fool!) the game works like this:

There are huge piles of (made up, QE’ed) money laying around in bonds.  This is because there is almost zero risk.  Unless you had bankrupt city bonds, but everyone knew that was a bit risky.

In the meantime, as the rate of interest keeps going lower (which is why the Fed hasn’t raised rates) that means stocks can keep going moonward because a Penny of Dividend is worth a dollar of stock price when the interest rate is 1%.

The first big gust of wind that comes along is going to collapse the bond market and the stock market for losses that could be 50% or greater.  It’s baked in the cake of longwave economics which is our forte around here (along with practical economics in all areas of life).

So this morning, with word that durable goods was up (better than what had been expected by some) the stock futures turned only slightly weak and it looks like the markets will continue to be more or less range-bound this week.

New orders for manufactured durable goods in January
decreased $2.2 billion or 1.0 percent to $225.0 billion,
the U.S. Census Bureau announced today. This
decrease, down three of the last four months, followed a
5.3 percent December decrease. Excluding
transportation, new orders increased 1.1 percent.
Excluding defense, new orders decreased 1.8 percent.

Transportation equipment, also down three of the last
four months, drove the decrease, $4.0 billion or 5.6
percent to $67.3 billion. This was led by nondefense
aircraft and parts, which decreased $3.4 billion.

Shipments of manufactured durable goods in January,
down two consecutive months, decreased $0.9 billion or
0.4 percent to $232.3 billion. This followed a 1.8
percent December decrease.
Machinery, down following five consecutive monthly
increases, drove the decrease, $0.9 billion or 2.6 percent
to $34.5 billion.

Bad news:  December numbers were revised downward…and they were bad already.

Comments to come from Janet Yellen and the fluid situation in Ukraine could change that, however, so we shall see.  The worms of inflation hasn’t turned into golden butterflies just yet though but this week’s Triple A Fuel Gauge Report shows gas is up 4.7% in the past month and so at some point, the soaring prices at the store and gas pump are going to start hurting other areas of the economy.  Just not this morning – yet.

Ukraine: The Dance

Step 1:  Protesters storm Crimea parliament building.  No, wait, the Russian flag went up so the mainstream is calling these guys “armed gunmen” in lieu or protesters.  See how this plays?

Step 2:  Russia docks warship in Havana, Cuba.  (Remember my references to Cuba Missile rhymes?  Close, huh?)

Step 3: Ex Ukraine president hangs out in Russia.

We shall see what the day brings…but the biggest risks will be over the weekend.  I may go to cash for the weekend or short….just thinking out loud here…

Merkel Jerk

By this account Germany’s Angela Merkel looks like she’s selling the EU brand of soap to Brits who are skeptical of joining the EU and giving up local governance.

The EU reminds me of the old Yellow Pages ads: “Never stop selling…

Crapping in Your Food (A rant about “Change”)

Government apologists (a/k/a/ corpmedia) are all over the story this morning about how the Fooled and Drugged Administration is about to change food labeling laws so that they reflect what Americans actually eat, rather than the fictional  12 potato chips that some fool thought was an “average serving.” 

Whoever that doof was must not drink beer.

Here are two HUGE problems that the government is not addressing in their labeling reform dance because it involves big corporations that, in turn, give megabucks to the people who go to Washington to get rich:

1.  The proposed FDA Rules do not out genetically modified content as part of their labeling reform.  I noted this week how Forbes is labeling GMO as a pseudo-controversy.  Not around here, bubba. I’ll explain in a sec, but I don’t do poison-laced foods my body was never designed to process….

2.  The second second level of crapping in your food comes as a tip from a friend who runs a consumer cooperative in the Northeast:

A big issue that’s under the radar is that the USDA is asking for comments on a proposed policy of coexistence between farmers growing sustainably and conventional farmers. Basically, the policy will put the burden of contamination from GMOs or pesticide spray on the sustainable farmer who was damaged, not the farmer who sprayed or used GMOs.

And, if you’re in Pittsburgh, this press release from the East End Food Coop will be of interest:

“Right now there’s already a burden placed on organic growers operating in close proximity to fields containing GMOs,” explains East End Food Co-op’s Marketing & Member Services Manager, Heather Hackett. “They often lose acres of their land by leaving it empty to provide a buffer between the genetically engineered crops on their neighbor’s farm and the natural crops
on their own.

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Coping: Revolution + Digital = Digilution

For a long time, people on the web have been talking about global revolution.  You heard terms like “globalrev” and “Arab Spring” and how what’s going on in Ukraine fits the mold.

Unfortunately, the concept of globalrev or democratic uprising in places like Ukraine rings hollow – especially to the Russians. 

As Russia’s head of their Foreign Relations Committee (of their equivalent of our Senate), Mikhail Margelov explained Wednesday:  The government that arises in Ukraine is not necessarily democratic.  It’s just whoever was the most violent, persuasive,  and assertive on the streets of Ukraine.

As the violence continues moving eastward in Ukraine, inspired (and partially funded by the West (US/EU) the real objective is clear to any military strategist:  Deny the Russians that warm water port in Sevastopol and thus, thug-led  “revolution” becomes the order of the day in the Crimea.

But what of the aftermath.  How does that work?  We’re also left to ponder whether revolution – more properly rerevolution – could come to the United States.   It’s a question we tackled in Peoplenomics recently and data suggests that the answer – at least in conventional revolution terms – is no. Not likely here.

The basis was study of more than 200 revolutions what emerges is a nearly universal existence of one (or more) major third parties to throw funding into a revolution.

Even when we saw the fall of the Former Soviet Union (FSU) it’s no secret that the US wasn’t going to win on simple competitive forces.  So, the Reagan administration announced the Star Wars Program and that, essentially, forced the Russians to ramp-up spending on defense to levels that didn’t make sense.  Collapse followed shortly thereafter. The mere size and scope of the Strategic Defense Initiative placed it beyond Russia’s grasp.

Thus,. the Russians allowed their system to begin changing, but in many ways that change-rate has been too slow for the West.

As a result, the interest in economic subjugation of Ukraine and, eventually, Russia itself.  The domination of the EU from “Lisbon to Vladivostok” is clearly in play. 

Yet Vlad Putin finds himself in a similar position old-style patriots in America:  At what point do the borders become firm and a country takes a stand?  Could Ukraine be the Russian Mexico?  In some sense, perhaps.

Indeed, the long border between Russia and Ukraine: 1,426 miles worth.  As a crow flies, that’ further than from Tijuana to the lower central mainland of British Columbia.  By comparison, the US-Mexican border is 1,933 miles long and we all know how problematic that border has been.

Prospects for US Civil War:

Personally, I don’t believe that the prospects for civil war (in conventional socioeconomic terms) is very high he US.

But there is a very high probability of attempts to “polarize and galvanize” by anarchists who don’t have the patience to work through the existing available processes to achieve change for their own ends.

The difficult task (likely to become harder, not easier) is caused by a high level of polarization as a result of native economic forces and where we are in the Long Wave economic cycle.

Recall that during the 1930s we saw such groups as the Industrial Workers of the World, the Socialists, and even groups like Technocracy make inroads.

In all these cases, however, and despite some deaths (martyrs as branded) by the Wobblies of the IWW, for the most part the increased social spending and ready work opportunities of the New Deal served to defuse the situation.

In much the same way, the most likely course for the US is to follow a similar path:  Having secured  delays of things like pipelines crossing western Asia, the most of the US is not to consolidate industrial resources, specifically energy in large measure, in order to have a solid foundation going forward.

But it doesn’t mean that anarchistic attempts at domestic revolution won’t arise.

In fact, just this week there was a report on LikeLeak about how “Police probe threatening ‘1 percent’ graffiti left on Atherton (CA) homes.”

In the Atherton case, the targeted one percenters are a majority. 

That area – in the hills west of the South Bay 101 freeway and the 280 freeway that winds its way up the peninsula that San Francisco sits on the north end of – is not exactly low income.

There’s a reason for that.  Atherton is just 20 miles up from San Jose, even less from Santa Clara.  And only 14-miles from Cupertino, famous for another major Silicon Valley company.  All those well-paid people have to live somewhere.  And back when we lived on our sailboat in  SF (2001), homes in the area were typically in the $750k-$1-million class in 2001 dollars.

It’s not what you’d expect to find at the heart of a revolutionary movement.  People driving 5 and 7-series Beamers didn’t use to be prime recruiting material for revolutions.  In the main, they “got theirs.”

On the other hand, if you’re trying to “send a message” it would be a logical place, but then so would the hills of Palo Alto, the mansions around Los Gatos, and all the rest.

Digilution

There is one thing new on the “build a revolution” front that has not been present in past revolutions, like the US Civil War, or others – and we see it operating in Ukraine and we saw it (past tense) in Arab Spring: 

Mass communications of the one-to-many sort.  The same stuff that makes flash mobs.

The conventional “revolution” needed a much more dedicated core than the modern variety.  There was a need for a critical mass to evolve.  Some place that number at anywhere from 3 to 10 percent of a population.

What’s changed (and it’s one of the reasons I fully expect one of the future casualties of digital revolution talk to be the Internet in general and social media in particular) is that one person with an idea can use digital means to turn a hundred dollars worth of idea and promotion into a million, or more, page views.

Like old-style revolutions, there’s a critical threshold that would be necessary to achieve a critical mass to overthrow a government, as happened in Arab Spring (and is going on in Ukraine) but the emphasis on the aspects of digital revolution/ digital warfare have not been so pronounced in Ukraine because it scares the PowersThatBe shitless.

One discussion worth noting, on point, is this Bloomberg video in which  Google ideas founder Jared Cohen, explains how Twitter and other digital platforms shaped the narrative of what was going on recently in Ukraine.

Meanwhile, there’s another revolution going on – this one down in Venezuela, and as was the case with Ukraine, there is a dominant external interest (the US) dumping in plenty of support to the various interest groups.  Remember: Venezuela’s former leader Hugo Chavez got at least some of the country’s gold back and the country is a prime supplier of US energy.  So what’s not to go for?

A very good article is “Protesters in Venezuela, Ukraine turn to peer-to-peer messaging app” to achieve their ends.

It all puts governments globally in something of a box.  It’s becoming clear that the Internet is a kind of huge Brain Amplifier.  And, because it’s about quality of thinking (and argument) it holds the potential to become a kind of upper boundary layer, beyond which governments can not go, or they will face failure through the prospect of digilution.

Future of Digilutions

What’s difficult, however, is figuring out (for the PowersThatBe) how to put down the limits on personal use of communications.  There are a number of tactics.

1.  Licensing of the Internet.  In this scenario, there would be a worldwide licensing scheme set up – just as there is for cars with international driver’s licenses and such – and it might include (in place of safe braking distance questions) “What’s the right response to a message about a flash mob?

2. Government Control of Social Media and Peer-to-Peer.  Under this scenario, government would admit that it is worried about prospects for digilution but in order to maintain order and prevent a revolution over digital fascism, it would simply own the digital tools and limit their use through word filtering strategies.

3.  Hands Off – Then Respond With Force.  This is the one Russia is actively looking at not just for Ukraine’s west (which is more European-leaning) but now they have to face the issue in the Crimea.  That’s a lot harder.  So does government bend to the will of the people, or will Russia put up a major military move this weekend and march in with network blocking tools, and shut down further digilution efforts?

4.  Hands off – Roll With Change.  This is ideal – except, of course, that when true democracy reigns, it’s anarchy shortly thereafter.  The poor will vote themselves rich, the rich will be beggared. Communism was nothing more than democracy pushed to the extreme, is one way of thinking about it, except that eventually a dicktator (sic) will arise and that’s that…  But, of course, the rich will lose power in this work out, so it’s not even really on the table.

How It Runs from Here:

1.  Revolutionary thinking is part and parcel of the Long Wave economic cycle.  Ask the Wobblies.

2.  Revolution + digital = Digilution.

3.  Digilution reduces the threshold for change and ends “barriers to entry” by other parties.

4.  Digital unity in a Digilution has two aspects, however.

a.  Unity if immediate action (Ukraine or Arab Spring)

b.  Unity in long-term outcome.  This one often doesn’t work.  Ask Egypt and Libya, and let’s see how Ukraine works out in five years.

It’s like selling any other kind of soap.  Makes a lot of promises on the front end.  But revolutions and digilutions are no different than Proctor and Gamble selling soap.

Call me lazy, but I’ve read enough economics to see that the need for my personal participation in digilution is hardly necessary.

The continued watering down of paper money purchasing power, the hacks of Bitcoins, the bankruptcy of governments because of compound interest?  Remember them?  They’re going to do the revolution/digilution for me.  At age 65, I’m less interested in taking it to the street so much as being able to get across it, lol.

My only real task in all of this is (referring to the How It runs) list is to watch for my local #4 and then jump ahead of the crowd to the right answer to #4 b above.

That’s how to prevent jail time, make money and maybe preserve lifestyle, and as a bonus: Not get all wrapped around the axle of the police state.

Warren Buffet’s statement about class war (“…and my class won…”) may very well come back to bite him.  And those folks in Atherton, too.

But it may not be from something as “policeable” as graffiti artists. Compound interest and catastrophic returns to historical norms are just as effective as barricades, tweets, and Molotov’s and a whole lot less personal effort.  Slower, but slow is good anymore.

In the end, digilutions are just another brand of soap and I don’t see them cleaning governments any better where that brand has been used. It’s may be more appealing hype-wise, but it’s all HS&J (hype shuck & jive)  until Shangri-La* emerges from the digital wreckage. 

And I don’t see it yet – anywhere.

* [from Wikipedia: “Shangri-La is a fictional place described in the 1933 novel Lost Horizon by British author James Hilton.

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Russia Plays “the Nuclear Card”

In an interview on RT (Russia Today) Russia’s head of their Foreign Relations Committee, Mikhail Margelov made several interesting points about the current chaos playing out in Ukraine. There were a couple of points which deserve to be passed on as “thinking points” because they may be telling us something about how future events will play out. First, he expressed concern about the number of nuclear power plants that are operating in Ukraine (six) and the number of reactors (17). Recalling that this is the region of Chernobyl, he said Russia (which is obviously downwind) has legitimate security concerns. But in terms of the basis for the conflict, he said that Russia was not to fault.

Beyond Bitcoin: Transition to the Star Trek Economy?

Just posted for our www.peoplenomics.com subscribers: As Russia puts troops on alert this morning, we have our “Phasors locked on stun” this morning as we consider how the Star Trek economy worked. There are some very interesting possibilities, especially when we see the arrival (and momentary decline) of the new cryptocurrencies.

Home Prices: Losing Momentum

It looks like our often-stated “double dip” might get legs based on the latest housing index reported out this morning by S&P/Dow Jones in their Case-Shiller report:

New York, February 25, 2014 – Data through December 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, showed that National home prices closed the year of 2013 up 11.3%. This represents a slight improvement over last quarter’s annual rate of 11.2%. In the fourth quarter of 2013, the National Index declined 0.3%.

In December, the 10-City Composite remained relatively unchanged while the 20-City Composite showed its second consecutive monthly decline of 0.1%. Year-over-year, the 10-City and 20-City Composites posted gains of 13.6% and 13.4%, approximately 30 basis points lower than their November rates. Chicago showed its highest year-over-year return since December 1988. Dallas set a new peak and posted its largest annual gain since its inception in 2000. Denver declined 0.1% and is now 0.7% below its all-time index level high set in September 2013.

The chart above depicts the annual returns of the U.S. National, the 10-City Composite and the 20-City Composite Home Price Indices. The S&P/Case-Shiller U.S.

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Bitcoins: Not Too Big To Fail

Reader Note:  We’ll post an update when the Case Shiller/S&P Housing data comes out this morning.  Likely before the market opens…so if you’re an early reader, drop by again…

You can see in this morning’s headlines one of the reasons that I’ve been skeptical of Bitcoins.  Oh, sure, the idea of a “pure” currency, unloaded by 100 years of debt sounds altruistic and all, but when comes down to cases, the Federal Reserve is not going to bail out a Bitcoin operation, but they will bail out banks at the drop of a hat.

Is there a lesson here?

The reason we begin here is that after multiple (successful) hacking attacks, Mt. Gox has gone by the wayside, or at least so it seems based on report like “Survival of Bitcoin exchange Mt. Gox in doubt” as reported by CNN Money.

Still, there are other Bitcoin exchanges in operation and over at the www.bitcoincharts.com site you can find quotes from other coineries.  Hit the “charts” tab.

I’ve mentioned in the past that Bitcoins are doing something of a rhyme on the 1634-1637 experience in tulip bulb prices in Holland.

May I offer you a starting point for some excellent reading if you are trying to sort out what to expect from Bitcoins going forward? 

You may have never heard of Aswath Damodaran but he teaches corporate finance and valuation at the Stern School of Business at New York University.

One of his best books of general interest if you’re learning about investing is available from Amazon:  “The Little Book of Valuation: How to Value a Company, Pick a Stock and Profit (Little Books. Big Profits) “  Easy read, packed with good info.

Back to point:  If you go poking around Damodaran’s website, not only will you find a treasure-trove of fine articles summarizing years of study and research, but his analysis of the tulip bubble (and pricing) is very much on point when you’re trying to brain out where this whole bitcoin “thing” could be leading.

As I reread his paper this morning, it struck me that we may be about in Phase 3 of the Bitcoin bubble.  And that should be followed by Phase 4 which he called the “aftermath.”

And what does an aftermath look like?  To pull a quote from his paper – on tulip prices, remember…

“In the aftermath of the bursting of the bubble, you initially find investors in complete denial. In fact, one of the amazing features of post-bubble markets is the difficulty of finding investors who lost money in the bubble. Investors either claim that they were one of the prudent ones who never invested in the bubble in the first place or that they were one of the smart ones who saw the correction coming and got out in time.”

While I still believe that a Federal Reserve-backed digital currency (which would be unladen with debt and automatically taxed through a clearing operation) is still a fine resolution to the two-tier currency problem as the US dollar continues its devaluation process (-3.4% per year on average purchasing power since 1913, including the Great Depression), we can see the evidence accumulating that there is enough computing horsepower being directed at “crypto” currencies, that it may not be possible to evolved an all-electronic system of money at this time.

Of course, the experience of Bitcoin might be incorporated as part of a move to begin licensing the Internet, and the ultimate criminalization of hacking, just as the FCC’s Communications Act of 1934 set up licensing of radio waves (and set up enforcement for what were that era’s “hacker equivalents.”

Sorry if you didn’t get out…but one of these days, the price may drop down to where it’s appealing again.  But then – as I see it – only as a kind of digital tulip; a point I haven’t wavered on since the question first come up.

Reading Damodaran on Bubbles is certainly not a waste of time if you’re trying to keep your non-virtual wallet intact.

Ukraine Delay, Russian Window?

We read this morning how the new “unity” government announcement out of Kiev has been put on hold for a day (longer?).

As the cited story relates, the EU is pressing for quick action.  Reason?  The sooner the EU can lay out a relationship with the new government, the sooner the EU can begin to flex its muscles in the direction of Russia which has, besides a huge agricultural interest in the region, control of the pipelines carrying petroleum products to Europe.

EU leaders were busy funding and promoting the “revolution” in order to seize control of this energy choke point from the Russians and the strategic problem they have is that the longer the Unity group doesn’t get Unified, the strangers the case of the ousted president, which in turn, would give Russia a pretext to march into the power vacuum.

Meantime – and is it related? – we find the timing of the latest exploit aimed as US military veterans to be a particularly odd event.

Go read :”Operation SnowMan: DeputyDog Actor compromises US Veterans of Foreign Wars Website…”

Could this be a sign (under cover of the snowstorm in Washington this month) that there is a cyber skirmish in play and that there’s more to come, all peripherally related to the Russians getting reader for…..for….what?  If anything….

Disposable Americans: NM Radiation Leak

The leak earlier this month of atomic leftovers, including plutonium, that spread a plume of radiation over New Mexico, up over the Texas Panhandle and into the square states, has us wondering again about the honesty and candor of the US nuclear regulators.

A story in the Monday NY Times details what’s going on near the underground storage facility near Carlsbad, New Mexico.

That said, readers reports are starting to come in from downwind areasL’

“My son has been monitoring the radiation here, 20 miles north of Santa Fe and in the past 24 hours our readings have increased just over  50% above the normal background readings that we’ve been getting  on a daily basis for the past year or so since I got the monitor.  My son said he would try to separate the alpha, beta, X and gamma radiation by using shielding techniques he uses for that purpose.”

We’ll pass along the details as they come along, but if you live in that downwind corridor, the rad levels from Carlsbad up through Kentucky will be instructive to watch.

How to Run an Agenda

All of once, over the past month, or so, a series of bills that would allow discrimination over sexual preference (as counter religious beliefs) have been tossed in the hopper in almost a dozen states.  But only in Arizona has the measure been railroaded through by the state GOP and it would legalize discrimination on religious grounds.

And, just to mix even more emotions into this, here we have a political type in Delaware demanding that Phoenix be stripped of its SuperBowl plans

Any minute now, we’re expecting the EU to weigh in on this…

Gaye rights is already been moved into the international sphere with Uganda signing an anti-gay law.  This on top of what Russia, and other countries have done…

IRS – Tea Party Rules

Speaking of running politics, the Obama administration which had been moving IRS to rules that would have kept 501-(C4) groups out of politics is quietly falling apart reports the Washington Times in today’s editions.

All of which is being cast by some as a good move for freedom…but only if you like the eBay-like processes that buy American political outcomes…including the tax exempt pools of money.  It wasn’t just about the Tea Party, although that’s how it has been cast.  It’s about ALL tax exempts…

This is one thing the Obama administration was on the verge of getting right….so it’s going, going….

X-Flares?  Who Cares?

Every so often, the Sun comes out with an X-class flare, but just because they happen from time to time doesn’t mean the end of the world.  Take his one for example:

An X4.9 flare peaked Feb 25 00:49. The event occurred in NOAA AR 1990 (ie returning AR 1967) on the solar East limb.

Solar proton level started to increase with some delay and gradually.

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Coping: Outliers and Oddities in Life (WoWW)

Our trip through the World of Woo-Woo (WoWW) continues this morning with the first note being about the oddity I personally noticed on Monday when I published the “news” section of the UrbanSurvival site.  Specifically this part of yesterday’s report:

“However, if Russia was ever thinking about the HEMP option, that would plunge the West into the dark ages and would give Russia a free hand to rebuild its buffer, you likely could find a similarly risky period since the Cuban Missile Crisis.”

All of which wouldn’t have been noteworthy in the least, except for I happened to notice – just after publishing – this read-out on Windows LiveWriter:

However, if Russia was ever thinking about the HEMP option, that would plunge the West into the dark ages and would give Russia a free hand to rebuild its buffer, you likely could find a similarly risky period since the Cuban Missile Crisis.

Which I figured was one hell of a synchronistic wink from Universe about such things,  since (if you had forgotten) was when the Cuban Missile Crisis occurred.  Pretty good for a piece of software to offer that kind of feedback, is it not?

And, as posited in the Monday column, the WoWW is not gone, says reader Patti…

George … Woo-Woo has NOT disappeared. 

Just last week I had two incidents in one day!

1)It was evening and I was doing my usual “after-work” tasks.. picking up kids, going to the market(s) and preparing dinner.  This evening, I entered my car after a third stop and noticed that my inside car lights would not turn off; obviously, it was because I hadn’t closed the door properly.  But no, it wasn’t that or even that my electronic system was malfunctioning – somehow, the light switch on the inside roof of the car got switched on. Hmmm?  I smiled and turned the switch back to the “off” position.  My  problem was resolved.

2)When I got home, I carried the groceries into the house and placed them along with my purse and keys on the kitchen counter.  After I put away all the groceries, I went to place my purse in the bedroom and noticed that my keys were nowhere to be found.  I cleaned out my purse three times!  Not there, removed everything from the counter to make certain they weren’t “hiding” (inadvertently getting shoved under something).  Still, no place to be found.  Must have looked for an hour – my house got really clean!  Well, as soon as I gave up, I was standing in the kitchen talking with my son, turned around and there they were…. Sitting right out in the middle of the counter all by themselves.  I asked my son if he put them there – he looked at me like I was nuts (he’s 18) and when my daughter was asked, her only response was “Did you pray to your angels?”   Of course… I did.

The universe had a really good time with me that day!

A CLASSIC example of things disappearing and reappearing.  So I’ve advised our Canadian reader who had the disappearing wine rack parts to look in on them again later on today.  They may be back from “vacation.”

While that’s a damn fine report, here’s one from reader Ken that’ll be a hard one to beat:

Boy do I have a good one.. My wife baked cookies the other day.. she filled up the cookie jar.

So today she leaves for work and the two boys are here and we sit down for cookies..

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All Eyes on Russia

With the apparent victory of the US/EU/West-backed uprising in Ukraine the most tantalizing question is whether Russia will respond.  The main descriptive words being played on the BBC this morning seem to be “Nervous uncertainty” which certainly captures the moment.  But the mood goes well past the Ukrainian borders…

As I have reported for a number of weeks, with the closing of the Sochi Games, a kind of “handcuffs” come off the Russians from today forward and so with the ousted president calling “Coup!” it will be the next 96-hours – or never – for the Russians to make their move.  Say Friday or Saturday at the latest.

Our war gaming expert “warhammer” has some thoughts…

Czarist minded Vlad Putin is not a happy man today.

Read “Why a new Ukraine is the Kremlin’s worst nightmare…”

The ugly (to an oligarch) emergence of democracy in neighboring Ukraine puts a hitch in Vlad’s get along. Deposed Ukrainian President Yanukovych, a Putin puppet, insured that the Ukraine kept in step with Russia, particularly with regard to rejecting entry into the EU. Yanukovych instead planned to move lock-step with Putin in joining Czar Vlad’s emerging Euro-Asian economic union, despite Yanukovych’s former vassals and serfs strongly desiring membership in the western-focused EU.

Vassals/Serfs 1, Yanukovych/Putin 0.

It would prove an arrogant display of power for Putin to provide armed military assistance to remaining Yanukovych loyalists. Instead, most political pundits believe Putin will put tremendous and immediate economic pressure on the newly liberated Ukrainian government. The “outside looking in” EU then risks direct confrontation with Czar Vlad should it wish to assist, something Putin is betting the pacifist EU deeply wishes to avoid. As the economic hardships mount in the Ukraine, Putin’s Eurasian economic union plans will look more and more digestible.

Will the EU jettison the unsavory situation in the Ukraine just as the U.S.

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Coping: With a New Theory of Woo-Woo

The good news, such as it is on a Monday, is that the WoWW (World of Woo-Woo) is back.  This morning we not only have some fine reports, but in addition we’ve got a new theory to put forth to explain the phenomena…

First the reports:  We’ll start with this one from Canada:

A few days ago, we bought a small wine rack. It was a DIY kit. We laid all the parts out on the table and made sure the kit was complete. It was, and assembly began. When we got to the end and were adding cross base support we discovered one of the pieces was missing. We spent some time looking everywhere for it, even checking under couch cushions and in the linings of pieces in the area. Nothing turned up. Both cross braces were in the kit as I had held both of them and test fit them in dry run. I am expected the part to re-appear sometime soon. I’ll let you know.

Then from reader Andrew:

My beautiful mom (83) passed back on 2/5.

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Peoplenomics: Ukraine’s Economic Future

We take a closer look at what’s ahead for Ukraine this morning, given that there has been an agreement, followed by protesters taking Kiev overnight. It’s a timely matter following on the heels of our Wednesday report on commonalities of civil wars, the potential for it in former Soviet buffer states, as well as here in the USA. We’ll also point out how the EU is stealing the foundations of democracy. But first coffee and a few headlines, plus a check of port traffic (in order to pierce the veil of mumbo-jumbo surrounding the state of the economy) and a very telling chart that argues this economic cycle peaked in early 2000 and continues tracking to expectations… More for Subscribers ||| SUBSCRIBE NOW!

Backwards Friday

Note that the Coping Section didn’t post correctly this morning so the Friday news/market section is under the Coping section instead of the other way around. Even coffee doesn’t fix servers…