George Ure

Ure’s truly did not win the PowerBall last night, and if you have time to read this, neither did you by the looks of it, although a number of lucky people did.  Turns out the winners included one in Minnesota and two in New Joisey. (sic) The good news, such as it is, may be that there’s another column to read although I was anticipating being able to post my farewell, audios, sayonara letter.  Maybe (hopefully) next time.

This leaves me stuck in my “get rich slow” rut, which isn’t bad, but I’m an impatient cuss.  Markets are due for a modest rally at the open today since even a bleary-eyed amateur chartist should be able to count five waves down, so we should get a wave two in hear sometime, perhaps seven points up to the S&P 1,700 level, but we shall see.

One of the charts we serve up for Peoplenomics.com readers is a Global Index I devised a number of years ago.  And looking at it, reader Yohan wonders if I have considered an unhappy ending of global finance that would look like this (with his counts added)

It migtht work out that way, after all Japan was down another 1.59% overnight, but Europe is up a tad this morning, we the real key will be whether we get a quick bounce to S&P 1,700 for a day or less and then head down globally next week.

The bad news is that if we have just been through a Wave 1 down, and we scramble up a bit for a Wave 2, then Wave 3 down could be interesting since economic fundamentals are less than encouraging.  Particularly the Federal Reserve’s Consumer Debt report out late yesterday which showed, importantly I think, that Americans are back to sitting on their credit cards.

In the report, credit cards and the like are called “revolving” credit (like a revolver being pointed at you, I suppose) while “non-revolving credit” includes mobile homes and education loans.  The part that matters is shown to the right.

Yes, overall consumer debt was still going up at the 5.9% rate, but revolving debt (which I think of as largely consumer discretionary, except by people who have to bend plastic to eat) was down nearly 4%.  Again we see non-revolving debt (like student loans) up 10% but a lot of what’s driving that is likely to be people driven (from desperation) to buy education thinking there might be a job out there if they could just complete that online brain surgery degree.  Either that, or the number of people who said “Screw it!”  and just bought a pair of jet skis and headed to the lake is up.

Hard times make desperate people, and desperate people recognize that low interest rates won’t last forever and when they go up, no telling how bad things will get for the US dollar.

Oh, and on an inflation-adjusted basis since 2000, the Dow would have needed to hit 15,897 by January 1st of this year.  Since we can kick in another 3% for the year-to-date’s wild-eyed printing, that would point to an inflation-adjusted double top of the ultra long-term Dow around 16,373 but this isn’t an exact science because I haven’t been able to find any credible papers on the effects of quantitative easing on the effective long-term inflation rate.

Still, if it’s any help (and from an inflation standpoint it is) the reason we don’t see more inflation like  we should from all the printing by the Fed is that the money is going into dark pools on the sidelines and consequently, M2 Velocity continues to crater.  With it, job creation and some other inconveniences (government running out of dough and such) wander along.  But, we can’t have a delicious concentration of wealth omelet without breaking a few workers now, can we?

Which is not to call workers “eggs” – more like chickens or sheep would fit – so come this fall it’ll be “over easy” as the corps skate on ‘Bamacare and we the people will go nicely with cheese and toast again as we get “crack up” and the yoke is us.

Say, This is Exciting

Well, not really, but it is an employment indicator that some people (with no lives otherwise to speak of) follow closely:

In the week ending August 3, the advance figure for seasonally adjusted initial claims was 333,000, an increase of 5,000 from the previous week’s revised figure of 328,000. The 4-week moving average was 335,500, a decrease of 6,250 from the previous week’s revised average of 341,750.

The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending July 27, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending July 27 was 3,018,000, an increase of 67,000 from the preceding week’s unrevised level of 2,951,000. The 4-week moving average was 3,023,750, a decrease of 2,250 from the preceding week’s unrevised average of 3,026,000.

If you have a job, this may not matter much…

New Concept: MultiWar

In most of the MSM (mainstreammedia) there’s a propensity to cast wars into a simple binary model for ease of reporting purposes.  But, in fact, due to heavy communications, massive social and religious complexity, we are beginning to appreciate that there is a new form of warfare emerging which we call the “multiwar.” 

From a design standpoint, it means a war with multiple sides and instead of a traditional mano y mano (man and man) binary, we see developing in Syria the idea that there may be three (or more) sides. 

Obviously, the MSM reports on the Assad (existing) government, which is backed by the Russians.  And, in good binary simplifications, the “rebels” are oft shown as “freedom fighters.” 

But now we see some US intelligence types as drifting toward our multiwar construct with as Deputy CIA Director Michael Morell considers that al Qaeda taking over the Assad government is becoming a real possibility.

This trilateral war might even become quadular (other Ureism)  in nature, depending on interests of  nearby Gulf states. 

From an analytical standpoint, we hark back to early Star Trek days and 3-D chess. Yet even here, the propensity to confine the game to simply two players was persistent.  In hypercomplexification, the global geopolitical game is multiplayer and multilevel.  So perhaps as a thought model, the Langley crowd should drag out the 3-D chess set, make up some basic rules, and have three players now, instead of the binary baseline?

From the War Gamer’s Desk: 

EBM Holds True, Again!

Love to see my high-powered theories work out in real-life:

Good Morning George,

Here’s a supporting piece of evidence for Ure axiom that “everything is  a business model.”

Eisenhower’s farewell address warning comes to mind:

“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist.”

~ President Dwight D.

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We begin this morning with a note about the bombing (via drones) of militant installations in Yemen.  This marks part of an aggressive US effort to stamp out what is seen as a threat which has resulted in the extended shutdown of 19-embassies in the Middle East as tensions are running high.  Word is that the terrorism escalation was commenced when a leading terrorist leader sent word to the Yemeni factions that it was time to roll with an attack on America.

We hit first and more is likely to follow..  Since the intercepted telephone call from Ayman al-Zawahiri originated in Pakistan, we will likely see additional drone strikes there, as well.

Yemen is a very dangerous place:  It sports, last time I checked, the highest birth rate in the world and a lot of very poor people who are easily converted to militants by marketers of terrorism which are not in short supply there. 

As a result of today’s drone (or bomb) attacks, the US and British have told citizens to leave.

While you undoubtedly have enough common sense not to visit Yemen without coaching, the
State Department this morning issued this travel warning:

The U.S. Department of State warns U.S. citizens of the high security threat level in Yemen due to terrorist activities and civil unrest. The Department urges U.S. citizens to defer travel to Yemen and those U.S. citizens currently living in Yemen to depart immediately. 

On August 6, 2013, the Department of State ordered the departure of non-emergency U.S. government personnel from Yemen due to the continued potential for terrorist attacks.  

U.S. citizens currently in Yemen should depart. As staff levels at the Embassy are restricted, our ability to assist U.S. citizens in an emergency and provide routine consular services remains limited and may be further constrained by the fluid security situation.

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You can almost feel the tensions mounting as the US has extended its embassy closures due to concerns that an al Qaeda/militant Muslim attack would occur on American interests somewhere following release of recent video on the ‘net.  Worst of all, there’s no clear timing indicated and threats have been followed by action anywhere from a few days to almost a year in the past.  Which brings us to this morning’s developments and a few observations, starting with this report from Bernard Grover in our Jakarta, Indonesia bureau:

“Gizmos & Bombs, Chief!  Timeline:

Saturday night-public water system for west Jakarta crapped out when the pump(s) caught fire. Estimate 7 days to restore. Water trucks to deliver starting tomorrow.

Sunday 7pm-internet crapped out. All 3 systems I use. Just now able to tie my tablet thru my cell phone others still out.

Sunday 9:30p-the Buddhist temple 600 yards away (that I attended just Saturday morning) had a triple bombing. The two later eplosions were timed to hit after first responders arrived. 3 injured. Police anticipated 2nd and 3rd, and waited to enter. Suspicion falls on Myanmar sympathizers, but the jury still out. This morning’s Kompas strangely silent, but TeeVee full of it.

“Buddhist temple bomber disrespects sanctity of Ramadhan: Minister.”

The sound was of large fireworks, which are common here at the end of Ramadhan, so no one panicked immediately.

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My friend Howard disagrees with my contention that government buying and federal pressure is the reason for the ammo shortages in America.  In fact, he sent me a very long emails about this:

“I’m amazed how frequently you don’t listen to your own core principles. For example, if everything’s a business model, then why can’t you see that who profits is the main way to see who is causing a situation?

Thursday, you repeated the completely spurious conspiracy theory (not once, but twice!) that Obama and the supposedly anti-gun crowd have engineered an ammunition shortage.  Complete bull shit, to put it mildly.

Who profits? If every deranged and even the sane gun nuts are frightened into buying mass quantities of ammunition, the same way they bought guns from a bogus fear of shortages and seizures during the first four years of the ONLY ADMINISTRATION TO EXPAND GUN RIGHTS IN OVER 50 YEARS, then the manufacturers and right wing fund raisers make out like bandits, which they are.

1) Plant fear of what might happen that will create shortages or even outright banning.

2) Schedule a plant shutdown or other temporary supply chain interruption.

3) Release tons of mainstream media press with video shots of empty shelves.

4) Double the price of the product, all the while selling more units.

Rinse and repeat.

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This morning’s report is a bit longer than usual, but with good reason.  Despite the distractions of small-fry stories of late (babies and trials and such) there are a number of very big stories like the NSA spying mess which deserve thoughtful consideration because they will steer the country’s future.  So read this morning’s Coping section below.

Since our roots are economic, we start with the generalization that  “You know your country is in trouble when a lousy 1.8% annual growth rate” spurs the Dow toward new all-time highs.

Have we lost our freaking minds?

Not only has the ring-around-the-nose crowd ignored historical precedents, but worse, seems damn few are able to comprehend that living on borrowed money eventually ends badly.  Especially when the bookies we’ve been borrowing from (can you say China?) come knocking looking for dough.

While economic leadership both in Washington and NY should be checked into rehab, out comes this morning’s report on job cuts from Challenger, Gray, and Christmas:

“CHICAGO, August 1, 2013 – Job cuts declined slightly in July, as employers announced plans to reduce payrolls by 37,701 workers, down 4.2 percent from 39,372 planned layoffs in June, according to the latest report on monthly job cuts released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

Last month’s total was 2.3 percent higher than a year ago, when 36,855 planned job cuts were recorded. Employers have now announced 296,633 job cuts since January 1, which is 7.3 percent fewer than the 319,946 job cuts announced in the first seven months of 2012. At the current pace of downsizing, which is averaging 42,376 job cuts per month, 2013 will come in below the 2012 year-end total of 523,362, which was the lowest annual total since 1997 (434,350). “

Still, no one seems to care and this week’s revisions to how GDP is calculated seems intent on continuing the national delusion as long as possible by a sneaky upward revision in GDP based on “virtual goods.”

With the market set to open a hundred points higher this morning, the next upside level for the S&P seems to be the 1,740 range.   In the meantime, tomorrow morning we’ll get new “offishul” unemployment data which will no doubt show the continuing decline in the number of ‘Mericans still working….

Yet despite the certainty of collapse when the dollar dies in a heap, anything less than disaster oughta goose the market up even more. 

No point checking into rehab until we have to.  At gunpoint.

Speaking of the Loan Makers

Loved the email from our resident war gamer this morning, since we’re on borrowing from China…

“George,   I enjoy a nice container of Chinese now and then, but it seems my “live in fame or go down in flames” USAF plans a different way to “contain” some (or all) Chinese.     

The rub with treating a rising superpower like one’s enemy is that they might actually BECOME one’s enemy. 

&

But then, for all we know, they might have ALWAYS been the enemy.  Someone must assume that mantle for the world to be right.   So look for some strategic te ta te between the Dragon Empire of the Eastern Pacific and “the land of the free” in the days and years to come.  As you frequently remind your faithful legions, “everything is a business model.”    Cheers, “

Maybe  Robert Ringer’s book is still making the rounds. Winning Through Intimidation.

Near as I can figure it, my friend, its an infinitesimally small move from “creditor” to “enemy….  Now, since we’re in the moneychanger mindset…

Creative Mortgage Solution?

Keep an eye on Richmond, California, where the city is trying to use eminent domain to take over a block of 624 private homes which the city could get for 25-cents on the dollar.

Am I the only one who notices that at the macro level, mob rule is arriving with government taking of private property likely to go crazy?

Just this morning there’s discussion in New Jersey of using eminent domain at the Jersey Shore. 

There may be a silver lining in eminent domain, however:

Near as I can figure it, one way for Detroit to get out of bankruptcy would be to employ some creative finance:  Use eminent domain to confiscate all property that’s unoccupied for six months for nearly nothing, then refi it, and lease it back for 99-years or offer it for sale dirt cheap. Take the spread and have fun.  Detroit could own lowest cost of living of anywhere in ‘Merica.

So much so, in fact, that “Detroiting” could become a new national model….of course it screws the CMO holders, but mob rule doesn’t care, even if that would trash CMO holders which might include banks which in turn would….forget that, the only ripple that matters is this one in today’s muni finance world.

Continuing with my Structured Finance 503 lecture,  selling the existing city to a New Detroit Public Corp, (a municipal corporation) then allows us to strip out the retirement obligations of old Detroit, which in corporate terms would be a leftover shell with only retirement obligations and those could be dumped on Obamacare and Social Security when our buyout of the Old Detroit ends a few billion short of what they need… sh*t like this is common on the private side, so wtf, why not in public finance?

New Detroit becomes a city-state unto itself and a little India of the Midwest…

Hell, I should run for office.

Mexico’s Slo-Mo  Revolution

Of course the MSM isn’t calling it that, but the drug cartel whacked a Mexican Navy admiral this week and so now arrests are underway.

Between Mexico and Afghanistan, do we need to invent a new word like drugvolution?

More After This…

“Designed in California”?

While a certain computer company mentions where a lot of product engineering is done, we notice the report that they seem, according to this report, to be parking $82.7 billion offshore.

Of course, Apple is not alone:  HP, Intel, and Google have many billions offshore, too.  Clearly, designed in California must refer to tax planning=.

I figure if a product is sold in America, it oughta be taxed as though made here, since to do otherwise simply shoved jobs to India and China and no, that’s not protectionism  so much as self-preservation. 

Especially since Fearless Leader is planning to give yet more tax gifts to BigCorps and punish small business with still higher tax rates.  You can tell who’s administration has thrown in with the corporate coup, huh?

Quake Watching, Doom Porning

There was a post on Godlike Productions last night which predicted a 10.0 -plus quake this morning in the Marianas Trench/Challenger Deep area and said everyone should seek shelter.

We’d sort of los interest in global coastal events, but the specificity of this one made it past our filters.   If you’re reading this, it didn’t happen.  If you are reading this after the fact, then whoever this poster is deserves immense respect and someone in government oughta talk to ’em about who their connection is and how that works.

—

Meantime, as we sailed last “doom time” we note that disaster porn is as rampant as always.  Just the other day I got flooded with emails about the much heralded “black hole in the sun” report that had people scrambling to get under the bed.

With about 30-seconds of clear-headed thinking the worries were dismissed around here:  First because the photos of the sun were several weeks old and thus any “piece that broke off and was heading for earth” should have destroyed the planet weeks ago.

Then there’s the little matter of it only being an area of dim infrared which (not to be an I-told-you-so’er) is common because the Sun is having an epic fail solar peak which will leave the earth much, much cooler over coming years.

And if you do a simple search on “record lows” you’ll find that this past weekend in Illinois involved records to the downside.  The cold drew down the Mississippi to St.

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