The Federal Reserve’s ABS Braking System

With all due respect to “Jammin Janet” the Federal Reserves modus operandi seems to have been to slam on the brakes at the free money window a month or two back, and then sort of pump the brakes, hoping for a smooth stop of deflationary pressures, so rates can be raised slightly this fall.

As you can see in the short-term H.6 Fed Money Stocks data, the rate of M1 increase has come back up to 2.5% while broader M2 is running 4.6.  And Trader Bart’s estimate of M3b (reconstructed) shows, the M3b is running around 2% which is still slightly below Fed prayer levels.

If you look closely, though, you can see how people are trying to arb things up.  That last hour press on gold Friday, for example.  It doesn’t take away from the 10 year being just over 2% and it doesn’t mean we are out of the financial woods yet.

The reason the ABS analogy is useful is this: 

If you slam on the brakes on ice too hard, you lose control.  By the same token, when the Fed slammed on the brakes, they have done so in a measured way.  They don’t want to lose control.

Ideally, rates will bottom out over what’s left of summer, we will see a tiny increase in rates in September.

This will drive people by the thousands to lock-in real estate deals because yes, rates will revert to historical norms and they are far below those levels now.

When the herd starts to move into real estate (big jump in Housing data) then the Fed can pump the brakes just so.  Enough to get the economy going again, but not so much as to send things into hyperinflation.

Gold prices, even with the Friday bump are telling us the Fed is still in control, but the reality of the Long Wave in Economics is the terrible bottom is not in yet.

In order for the meaningful bottom to arrive, we need to see a massive destruction of both debt and savings – none of which has happened yet.  Check with the Greeks and Cypriots on how much fun this is.

But the amazing part is that the doomsters are saying “World Ends this Fall!!!”

No.  Go look at the data.  Go look at Trader Bart’s M3b.  Go continue the growth rate of money from the 2009 point where print to save became the regimen.  The Fed as I read it has yet another Trillion of QE they could make up, if they really wanted to.  And, if things get bad, they will.

So for now, we continue with a very skeptical off-planet perspective.  The Fed is pumping the brakes, trying to arb up rates.  When rates go up, people will revert to the “Buy now before prices go up” mentality and the economic recover sees our one more massive upside.

On the other hand, an accident at a major player could spin the world into the financial abyss. 

We’ve been telling you to keep an eye on Deutsche Bank, for example.  New CEO is sounding less than upbeat about legal problems and just Friday key counsel stepped aside.

The reason for concern here is evident when you look at the Comptroller of the Currency’s most recent quarterly report:  Banks are back to increasing their Net Current Credit Exposure (NCCE).

We seem to be building towards another 2007-2008-like spike and you know what happened at that spike high in 2009 – the world was ending as real estate imploded.

Deutsche Bank is huge.  In one story back in June when the co CEO’s were “shown the door” DB’s derivatives book was placed at $54-trillion.  To put that into perspective, the US Gross Domestic Product is less than $18 trillion.  Thankfully, this is all supposed to be hedged.

All of which sets up a fascinating question the markets may be answering as we head into the fall.

“Are the problems in Deutsche Bank big enough that they might need to be helped or (God forbid) bailed out? “  And the follow-on question is “Who’s big enough to do that?”

I’ve got a crazy pet theory about how to bail out a “Too Big to Bail” problem – should ever one come along.  And Deutsche Bank – should things blow up – might be an interesting test case.

Obviously US taxpayers would scream bloody murder if there was a move to bail out a foreign bank.

But there’s another way to have an  international bailout of a super player.  And that’s what I’d describe as the “Distributed Screwing” approach. 

Let’s say an International Monster like Deutsche (though I don’t think they will) ran into trouble.  What would happen if there was a “structured failure.”

Under such a scheme, the Monster Bank would “stiff” US banking counterparties in a proportional kind of way.  Laying off their cost of a bailout on US and other country’s banks who did business (as counterparties) to the Monster Bank.  It’s be like a deliberately inverted Herstatt effect…

The slick thing about this is it spreads the pain around, no one in the US could object to saving the “poor victim” US banks, and should a little “extra” be distributed to the rest of the derivatives poker players at the table, then the Monster player could be saved without the host country having to put up a dime.

It’s all theory, mind you…and a nutty one at that.  But crazier things have happened.

Still, this is not an immediate problem.  Big problems – like elephant pregnancies – take a while to gestate.  Between 617 and 645 days, depending on if you are talking Asia Elephants or African Elephants.

I’m guessing the gestation period will be about that long for the Teutonic species of elephant, too.  Then we shall see if a crisis is delivered.  But if it is, Ure’s Distributed Screwing Theory might just show up.  That’s how Depressions work…destruction of debt and savings.  A global Elephant’s death could do it all.

Ferguson’s Social Suicide

To mark the one year anniversary of violent death in Ferguson, there’s a quote in a Reuters’ story over here that’s worth reading:

“These were criminals, they weren’t protesters,” he said of the shooters. “There is a small group of people out there that are intent on making sure that we don’t have peace that prevails.”

Unfortunately, it is a case of social suicide.  A community that looked like it was beginning to get back together has, once again, been shoved in the direction of social suicide by what I am just speculating are the same people who support anarchy and don’t believe in the rule of law – unless it’s theirs.

It’s Called Payback

The story this morning out of Turkey about deadly violence in Sirnak and Istanbul may not seem like a big deal.

But it begins to fall into place when you remember the US just sent half a dozen F-16s to Turkey in order to launch faster attacks in the region.  And now we are going after Syria directly along with ISIS…and from where?  Why, Turkey, of course.

So look for Turkey to be blown sky-high with some frequency.  The thinking of the opposition (Syria/ISIS) is that even though asking the US to leave Turkey won’t work, if the country is blow up from under moderate leadership, they will have to flip.

Summer Rally Arriving?

Dennis Lockhart of the Atlanta Fed speaks today.  We’ll see if he hints toward a hike in September, or not.

Not much else going on except some bond rates and then productivity which comes out tomorrow.  To my reckoning, celebrating high productivity is dead wrong.  At 100% won’t we all have been replaced with robots?

Dow futures were up about 110 when I looked.  Which might be the start of the run toward the average annual high date:  August 26 plus or minus a couple of weeks.

Do you regret not buying bushel baskets of cheap call strikes for the August option expiration last Friday when they were cheap? You might get better odds on the Strip.  At least there you can get free drinks.

Matter Goes Shapeshifting

A new NOvA experiment gets into morphing neutrinos with interesting results.  Not sure how that turns into a free lunch or steak and lobster, though.

Read More

Coping: With Another Novel Weekend

Or:  “How I wrote a third of a novel and upgraded to Windows 10 in one weekend.”

Once again, I shall be short on words today because most of ‘em were drained out of me this weekend.  About 28,000 words and just over a hundred pages of text as I finished the first draft of my novel DreamOver.

Sadly, the problem with writing a novel – all 87,998 words of it and more than 410-thousand characters – is that it’s only a good start.

My friend Howard (Finance Mon$ter$) Hill warned me that getting something written was only about half the problem.  The second half is the proof-reading and tweaking.  It’s a daunting task, but I’m fortunate that my lifelong friend “the Major” will be taking a pass through it once I get it reasonably error-free.

The plot came out fine.  No animals were injured in the writing of the book.  And so far, only one draft has been printed.

There was a time when writing “The Great American Novel” seemed like quite the thing.  You read about writers like Hemmingway, and the ilk, and you wonder if they were really that good at typing and spelling as they went.

From what I understand today, most of the big publishing houses aren’t after diamonds in the rough – works of art that can be tweaked and cut into exotic gems.  What they’re after *(this is the genius of modern marketing here) is a “plug and play” that is press-ready and all they need to do is approve the “right cover” for it, turn on the publisher’s media blitzer, and presto, everyone makes money.

Were all writers in the past held to the same standards of spelling, syntax, and grammar as the lazy giants of today?  Somehow I doubt it.

That said, if you know anyone in the publishing industry who is looking for a good novel, have them drop me a line.  DreamOver is best described as “An Action-Adventure on the Frontiers of Reality” with a writing style and plot line that’s about in the middle of the literary triangle formed by Clive Cussler, the late Tom Clancy, and scientist Dean  (Entangled Minds) Radin.

I get connected with my literary “muse” nicely.  It’s a hard place to describe, but it goes something like this:

When you’re writing a fast-moving fictional book, you see everything as though you were watching it on a movie screen.  This vastly simplifies the writing process because it removes all the conscious effort at creativity.  Instead, as you watch this IMAX adventure roll out in your head, you simply write as fast as you possibly can, while trying to avoid too many typos.

Curiously, have one half-hour period where I found myself making tons of mistakes.  For the life of me, I couldn’t figure out why.  But, all of a sudden, it dawned on me:  I was watching the movie too fast in my head.  Because it was playing at near normal speed, I was becoming so engrossed in watching the plot unfold, that I’d become oblivious to the words that were going onto the pages.

I got up, walked around for a few minutes, adjusting blood sugar levels with a snack and a cup of cinnamon tea, and got back into the flow.  Only this time, I was conscious of the “pause” button in my head.  And I think the writing flowed much better – and certainly at a lower error rate – when approached this way.

I’ll try to remember to take the same approach here, as well.  The only thing different is that when “news writing” – a kind of typographical version of the old TV show “Beat the Clock” – there’s a real reluctance to hit that pause button because every second counts. 

But not really, as it turns out.

My Upgrade to Windows 10

As if pounding out 28,000 words, plus or minus an apostrophe, this weekend wasn’t enough, I also managed to upgrade to Windows 10 on my main writing machine.

If you’ve forgotten, UrbanSurvival and Peoplenomics live on two computers.  One is named Big Box and it’s the four video card, 12 gB monster with the big SSD and many terabytes of wasteland.

Most mornings though, the writing computer is SamTop.  A Samsung portable with the i7-cores, a terabyte drive, and until this weekend, it had Windows 8.1 on it which was entirely satisfactory.

Still, realizing that Win10 would likely be a bit more secure for travel and the like, I opted to upgrade now – before we go on our Peoplenomics cruise in early September to Jamaica, Grand Cayman, and Cozumel.

I’m not sure the improvements in security are real or illusory.  Sometimes I think Microsoft just rearranges where everything is and calls it an upgrade.  I still haven’t figured out how to set my own home page in their new browser (named Edge, for reasons that must relate back to a hangover someone had in marketing).  Explorer worked and anyone who could confuse a browser with an SUV should be allowed to compute or drive.

There are some real pluses to Win10, not the least of which is the screen is now much better behaved when you scroll in on certain applications to make type larger or smaller by using your roller mouse.

Simply hold down the “Control” key and run your finger on that middle mouse wheel between the right and left clicker buttons.  It’s magic.

The problem I had previously was that although it would work with my web writing tools (mainly LiveWriter), but after a line or two, the spacing would get screwed up on everything except the normal 100 percent scaling.

A little secret here:  That’s probably the source of about 50% of the errors in past columns:  When in the 100% scale mode, things are mighty small and I usually don’t get around to cleaning my glasses (and getting the last of the sleep out of my eyes) until around 7 AM. 

Not that something happens at 7 AM, though.  That just means I have only 54 minutes of writing to get the news and finance portion finished so the quality of typos hasn’t previously improved.

I’m operating on the theory that with a larger display on-screen, some of my gaffs will be evident even to me.  No doubt some readers will miss the former NY Times Crossword aspects of the column, but I’m still far enough from good at writing that shouldn’t matter.

The Actual Install Hints

Here are the three huge secrets that I found when installing Windows 10:

1.  Once you are ready to begin, if you are on a laptop, unplug everything from your USB ports before you begin.  I have two Logitech devices – a wireless keyboard (the fancy one with the backlit letters – another help when writing early in the day) and a wireless mouse.  The Win 10 installation froze at 92 percent on the program and 69% on the drivers until I hit the web and discovered that unplugging all USB devices save a keyboard and mouse, was the only way to fly on laptops. 

As soon as that was done, the installation was back to rolling along until the next problem came up.

2.  Once I had Win 10 installed (on SamTop), the next problem was trying to get the wireless adapter to work correctly.

Turns out that (at least on my machine) all of the previous wireless connections appeared to have been wiped out by the Win 10 install.

The good news was they weren’t – but that didn’t become evident until I decided before rolling back to 8.1 (where everything was working fine) that I would reboot the computer once and see if that helped at all. 

What got me thinking about it was the visual prompt that on the new Win 10 initial screen, there is a Wi-fi indicator.  Being a rocket-sturgeon (sic)_I figured a reboot couldn’t hurt, and in my case it solved everything.

3.  The third problem was reconstructing all things in  my browser which I thought would happen automatically, but it doesn’t. 

You’ll find a tool in the Browser settings area that will allow you to imp[ort your bookmarks from your previous version of Windows.

4.  Last, but not least, it wasn’t clear from the installation prompts that all of my Favorites would be playing Hide-and-Go-Seek.

Turns out that the simple “star” for favorites is now more or less an “Add Favorites” button while all your old bookmarks (and a lot of web searches which is more mysterious) is in the circular button called the “Hub”.

Apparently, the marketing people decided that when we go looking for something on Google or Bing, it’s worth remembering the search.  Judging by the searches it saved for me (most relating to the book which means they were one-time checks of a piece of geography in a scene) it was a waste of time.

Once you get past these few trip-wires, the rest is pretty much the same.  Maybe it’s a computational version of “the annual model” in the auto industry, but it seems to work – mostly.  And if you are planning a low productivity week at work, I can’t think of a better current excuse than to tell the boss:

“Hey…lighten up already.  I just upgraded to Windows 10 and I’m still getting used to where things are located.”

With luck, that will keep you employed for another month.

During that time – in fact the next three or four months – Win 10 should provide a good computing experience until the hackers and crackers all figure out where the musical program locations landed with this fine iteration of recurrent marketing.

And by this time, say next year, we will all be back in the same kettle of fish we were in relative to personal computers that drove us to consider 10 on a few laptops now.

Reader’s Writes

Haven’t opened the mailbag much later, and it’s time.

The “Yokes On Us” I’ve often remarked about the so-called Women’s Movement.  You’ll remember that was the drive which got women something near to equal pay, but it also roughly doubled the size of the labor force available to the PowerThatBe, which in turn kept unit labor costs low.  About here, reader James picks it up”

“You are right on…until 1982 one income at two dollars an hour cut the mustard. Electricity was ten dollars or less a month, gas was the highest expense for the car.

Read More

Pretend We Have a King

Today we proudly present an interview with the King of America.

Not that we have a REAL King, of course.  One of the best things about America is what?  That we don’t have a monarchy.  Instead, we have divided power between the Courts, the Congress, and the Executive.

Except, as a result, all the functions of the Monarchy are still fulfilled and those in charge are abled to exact the same tribute as a King or despot.  Funny how history works out.

Read More

Jobs Mortem

Just out from the Labor Department:

Total nonfarm payroll employment increased by 215,000 in July, and the unemployment rate was unchanged at 5.3 percent, the U.S. Bureau of Labor Statistics reported today.

Job gains occurred in retail trade, health care, professional and technical services, and financial activities.

Read More

Coping: With the Only “Warming” That Matters

Sunspots have fascinated man since their discovery in the Middle Ages.

And somewhere back there, an 11-year (roughly) solar cycle was also observed.

And then later, economists began to observe an 11-year economic cycle.  It was not a perfect relationship, however as it varied a great deal:

The Juglar cycle is a fixed investment cycle of 7 to 11 years identified in 1862 by Clément Juglar.[1] Within the Juglar cycle one can observe oscillations of investments into fixed capital and not just changes in the level of employment of the fixed capital (and respective changes in inventories), as is observed with respect to Kitchin cycles. 2010 research employing spectral analysis confirmed the presence of Juglar cycles in world GDP dynamics.

As one zooms out to even grander time-scales, there appears a relationship whereby every five (or six of these business cycles, there is a Kondratiev (Kondratieff) wave with a duration of anywhere from 46-years on the short side and 64-65 years on the long end.

Even further out, we see cycles that define the lifespan of a fiat (paper) money as upper bounded near 90-years, but whose length is largely determined by how quickly the value of money is “watered down” (debased) by simply printing up more money than is justified by economic activity; the results of which are mis-named “inflation”.

Economists like Keynes liked inflation as the fairytale became it was simple enough to explain to average people a “general rising of prices” rather than admit to something much more surreptitious: A deliberate government plan to print too much money in order to spend money from the future that had not yet come into existence.

It was this ignorance that led to the current crop of “Free Lunchers” in Washington, and although both corporate-owned parties have espoused a “balanced budget” (which would allow for stabilization of purchasing power) it hasn’t happened, nor do we expect it ever will.

The reason is simple:  It is too tempting – and easy – to step over the the printing presses of money and attempt to adjust the print rate in order to counter the normal flow of the business cycle, the shorter term and longer term cycles, including the Presidential Cycle, as one in called.

But our focus this morning is not on this big picture of how the economic cycle is adjusted – we will get to that in a moment.

Instead, we will begin this morning’s discussed with the 55 dead people in Japan, victims of the “longest heat wave on record” there.

A lot of climate change adherents are pointing to this as clear evidence that Global Warming is real, here, and a matter of urgent public concern.

But the more skeptical look at data like the sunspot data, historical weather data, and begin to see a relationship (with a bit of lag to it) between sunspot peaks and weather changes on Earth.

Moreover, there is another phenomena that garners little attention from the easily manipulated public, and that’s the matter of compression heating.

When air is compressed, it releases trapped heat.  When compressed gases expand, the lowering of pressure absorbs heat, which is why the air compressor air lines in the shop get so cold on a warm day when I’m blowing off a power tool or cleaning off the bench.

So we have to mention that concurrent with the heat wave in Japan, we see the forthcoming arrival of a typhoon in the region, as well.  Well off from Japan, though, this typhoon will be around Taiwan.

From “Elementary Meteorology Online” please see “Chapter 6 – Humidity, saturation, and stability” and then review the dynamics under “Adiabatic Compression/Expansion Simulation.”

.Here in East Texas we are about to have our own heat wave.  It hit just under 100 yesterday – which is average for this time of year.  And the next week, or three will be much the same with afternoon temps right at the top end of seasonal averages.

In order to cope, Zeus the Cat has been hanging out in my office where the solar panels assure a pretty even 74-degrees year round, except cold cloudy winter days when we rent a few BTUs from the local power company.  Since our solar is grid-tied, I can make some of that back when the sun returns.

When we’re not in the office (*where Zeus carefully watches the back of his eyeballs, if you know what I mean), I turn on the misters between the house and the shop.  These drop the temps several degrees.  Since cat body temps run 101.5, or so, we’re pretty careful to have the misters on, or the cat in the house for several hours during the day’s peak heat.

As to the misters, we started with a Orbit 30060 Arizona Outdoor Misting System Basic 3/8-Inch Cooling Set which was about $25 bucks worth and then tacked on a Orbit 30068 Arizona Outdoor Misting System Basic 3/8-Inch Cooling Extension Set for another $11-bucks and change.

Elaine likes to think of herself as a “desert rat” so even when it was 96 outside on the screen porch, she was out tossing around free weights and working out on her Tony What’s-his-name walker thing.

She comes in the house (air conditioning set at 77), does whatever for a while, then complains about how cold it is and goes back to working out to “warm  up.”

Those of us with Danish and Scottish genes (plus onboard R386 insulation) were never meant to be above 75, and frankly, my preferred operating temp is about 68F.  Cool temperature, steaming hot mug of coffee and I can  rock the paperwork for hours on end.  Flip side, I suppose, is Elaine’s risk of deep vein thrombosis (clots from sitting around too much) is about zero.

Meantime, I’ve been using the hot spell to collect water from my window-mounted air conditioner.  Last year, Elaine noted that it was putting out drops of water which were splashing onto the exterior wall of the office and she had concerns that would cause rot if not addressed.  It went on the ToDo list in 2014 and actually came up a couple of months ago.

I just added “How long would that take to fill up a 33,000 gallon swimming pool considering evaporation and loan mean temps?” to my 2016 ToDo list.

The answer to the initial problem (air conditioner drips splashing the office wall) was to drill a couple of 1/4” holes in the bottom of the A/C unit (being careful not to nick a line, motor, or anything stupid, eh?) and then placing a blue 5-gallon plastic bucket under it.

On  a good warm day, the condenser from the A/C will drop in about 5-quarts of water to the bucket.

I’m  not sure if that one is in the prepping books, but seeing as our friends over at Backdoor Survival are doing “Water Month”  (See: “16-ways to Conserve Water In Your Home”) I thought I’d make an unusual contribution.

I should mention my other biggie for summertime water conservation:  Don’t put ice in your drinks.

Not that I have actually practiced such a Plebian thing, but I’ve worked out a number of calculations that suggest water in the amount of about one ounce per cube MIGHT be used as an ice replacement, but not in my afternoon Martin, thank you.

I’ll have to check with Gaye on ice use in Mohitos.  This is the fun part of prepping, you understand. 

So far, this morning’s column has been little more than a recitation of facts and figures, along with a few heat-coping and water-conserving ideas.

It still hasn’t answered the BIG Question about whether Global Warming is real.  Sitting under the misters, cat under the chair I was in so he could be cool yet keep his fur dry, and sipping the afternoon Martin, I really didn’t much care, at least yesterday afternoon.

But this morning, Ures truly the Intrepid Journalitist (or Insightful  Urinalist or something like that) wanted to mention a little oddity that popped up in one of our www.nostracodeus.com data runs as a link.  *(Hat tip to Grady for finding this):

http://fire.pppl.gov/ 

This website has everything to do with the US fusion research program.

Take a look at the top of the page at the progress chart there.  See anything odd?

Well, to my conspiratorially curious mind, it sure seems interesting that in the 2005 (and earlier) timeframe, when a bunch of big corps and scientists were drumming up money for the Fusion project, that it seems (going from memory here) about coincident to the time that Global Warming was starting to pop as a great big deal.

And then – reading along the timeline, we see that like all big bureaucratic projects, the time to “first plasma” has slipped.  It has gone from a target date of 2020 back to 2024 and the US is pulling back/out of the fusion program.

Fits my notion “If we pay long enough we can get nothing to happen” approach to government projects.  Worked that way for the Great Society programs, if you’ll recall.  We still have the same poverty levels as…well, that’s off point.

But we do notice the fusion thingy is being built in France, by the way, not here.

All of which got me to looking at the relationship between the timing of Global Warming (replete with data jiggering) and the dreams of a fusion powered world.   I’m still in the camp that believes fusion has been done before, perhaps deep in the pyramids as a pulse steam generator source which might have driven low power steam…but that’s an aside.

While there are still many good pieces of science coming down the pike, it seems the presidential declaration of war on coal-fire generation which Obama just doubled-down on in the past week, means there may be something more going on under the headlines about fusion and a potential breakthrough.

The Boston Globe, in fact, says “Obama leaves coal nowhere to go.”

As part of the Obama administration sales plan for clean energy, the presidential blog this week went into a long discussion of the myths and facts about clean power, including a re-assertion of the primacy of climate change as a driver.

Yet, upon closer inspection, one can’t help but wonder what’s really going on:  Both the fusion industry and the nuclear industry (and in same cases overlapping players) have high stakes in promoting climate change.  The more they can do that, the easier funding will be and the more pressure will be on coal, which is a much cheaper (albeit in the short-term only) competitor.

Yet around here, we’re still not totally convinced.  Compression heating does happen, and in new and novel places when the water waters of the Pacific are seriously out of position, and I’m guessing because of the high solar cycle readings in the 2000-2003 period and the one we are now in.

Authoritatively, the National Oceanic and Atmospheric Administration explains:

El Niño and La Niña are extreme phases of a naturally occurring climate cycle referred to as El Niño/Southern Oscillation. Both terms refer to large-scale changes in sea-surface temperature across the eastern tropical Pacific.

Read More

News is Mostly Marketing

It never frigging stops.

Elaine came home with a bag of prewashed salad fixings (a salad and omelet is a good breakfast,, at least to my taste buds.  You oughta try it sometime).

But come to find out, it wasn’t really salad fixings at all.  Nossir:  It’s now an Antioxidant Kit.  Honest-to-God, I can’t make this stuff up.

But it does remind me that everything is marketing, a truth kinda co-equal to our Everything’s a Business Model.

Let me show you how it works.

Take the lead in the NY Post this morning:  Hillary’s FBI probe is indeed a criminal inquiry reports the Post.

The Post then quotes a source:

“I’m not sure why they’re not calling it a criminal probe…”

What’s the word we are studying this morning?  Marketing.  And who is the leading democorp? 

You see, this marketing stuff isn’t so hard to figure out, is it?

Job Cuts Suck

Writ large in this morning’s Challenger, Gray and Christmas job cuts report:

Monthly job cuts rocketed to the highest level in nearly four years, as U.S. employers announced plans to shed 105,696 workers from their payrolls in July, according to the report Thursday from global outplacement consultancy Challenger, Gray & Christmas, Inc.

The July total is 136 percent greater than the 44,842 job cuts recorded in June.

Read More

The Death of Accountancy

Think robots won’t take your job if you are a CPA or if you push accounts (receivables or payables) around for a living? 

Think again.

Ures truly has been talking to his network of financial terrorists, again.

No, not the ones that shovel pennies around to ISIS/ISIL or the AQ type.  Nope, the financial terrorists I deal with are the ones who set up things like auto payments, micropayments, automated accounting systems and specialize in workforce/process automation.

Read More

Feds Busting Preppers?

Especially when you read about how three men in North Caroline have been arrested on charges related to prepping. According to an Associated Press story, the men were… “…men fearing a government takeover and martial law stockpiled weapons, ammunition and tactical gear while attempting to rig home-made explosives” Now, as always, the devil is in the details. Anyone who can read a balance sheet can reasonably assume the US Government is in desperate financial condition.

Coping: With the Oneironaut’s Notebook

You may not remember what a Oneironaut is, so let me lift a definition from the UrbanDictionary to help you out:

“A person who explores dream worlds, usually associated with lucid dreaming. “

And yes, this morning’s comment is about another one of my lucid dreams, but a very curious aspect of them which is worth noting, and that is why I am writing this down for you.

Let’s begin with the dream:

In this one, I was with a group of family and friends – some of the same people I know from this life along with others and we were at a summertime party.  It was something like a huge block party and there were 25, or so,wandering from home to home,  people chatting abut this and that – when suddenly it occurred to the group that this would be a marvelous time to visit Europe.

With little further adieu, we suddenly all found ourselves at an airport in what felt like Copenhagen and we were going to take a recently added high speed train across northern Germany, visit the northern tier of Russian cities, and then return to where we’d come from.

One thing was different, however, and remarkably so:  The geography.  Across the whole northern side of German the coastline was littered with small islands.  I thought that was curious.

The group was shepherded into two rail cars (large, long, and quite comfortable) to begin a short trip on a low-speed line to a major station in Germany.  We were admonished by a tour guide to stay together because when we got to the “big station” there would be a zillion people and it would be easy to get lost.

Well, sure enough, we got lost and while the main body of the tour was off on the high-speed train to the east, but three or four of us were separated and then someone in the crowd picked my wallet and the next thing you know, we were on a low-speed train back to the west (off where the airport was located).  Near Copenhagen. 

About the only thing I had left was a small green card made of clear/green plastic and it contained a unique identifier, but I knew it was not electronic in nature.

We rode a couple of trains east, at first, thinking we would catch up with our tour group but after two short hops abandoned the idea and decided to return to the airport and head for home.

There was one other weird thing.  (Other than my card identifying me as passenger 477 or 471):  We sat behind the engineers (there were two) and on the trip west,. the railway was occasionally obstructed by self-running machines that were moving slowly around the tracks.

They weren’t doing anything…just being a nuisance.  So the engineers would slow, bump them out of the way and then continue.  The significant part was the conversation about how bad robotics were and how they almost ruined the world.

Since we had taken  a convertible for the ride from the trains to the airport, it fell to me (once we had started through the boarding line) to run back outside and put the top up on the car, since rain was threatening.  There were two other cars – both convertibles which I thought curious – and their owners were having a very difficult time as their tops were both broken and wouldn’t fit tight.  On e wouldn’t go on at all and the owner was cursing he’d have to drive it to a shop in the rain to get it fixed.

Back inside, I wandered back through the line and had a short conversation with an attendant about how it was that a metal detector had failed to pick up the brass buttons on a blue blazer I was wearing.  That was indicated by a simple, cheesy meter that was built into a counter we walked past.  Hardly a modern metal detector, at all.

There was a definite air of surreal to the whole adventure; the kind of slightly over-done shadows as though the contrast had been turned up a bit higher than necessary.

But then I woke and noticed the whole adventure has only taken about 50 minutes.  Elaine had gotten up at 3:04 (I noticed the clock) and my alarm goes off every (damn) morning at 4 AM on the button.

So why mention this dream at all?

I mean other than look for lost/missing tourists in northern Germany/northern Europe in headlines for the next couple of days?

We it’s because of the robotic platforms that were interfering with the operation of the railroad as three of us headed back west.

There were no computers anywhere in the dream.

And I don’t mean like “just this one dream…”  I mean that’s what I was thinking about from 4:00 AM until 4:34 AM this morning…trying to figure out why there are no computers in my dreams.

Occasionally, there is an autonomous something (like these useless things that clogged the rail line) but they were held in contempt.  The was no overarching machinery except of the sort that would be around if the world of technology had been flash-frozen in about 1945, or so.  But definitely pre-transistor and pre-atomic bomb.

And that all set me thinking along two lines of inquiry.

The first was whether there’s more truth to the old nursery rhyme/song “…merrily, merrily, merrily, merrily, Life is but a dream…”

Is it possible that the world we share is actually a large “group dream” and that “real life” is this other realm which hasn’t achieved the same “dreamlike” technology and which has been flash-frozen with basic electronics before the A-bomb?

You can wonder what this world would “dream like” from over there. 

I mention it because as much time as we spend dreaming, and I’m pretty comfortable saying this, you can over time actually begin to “map” that world  – the one we dream of.  The topography is different, so is the lighting, and even specifics of the geography are different.  Those islands of Northern Germany over toward Denmark don’t appear on “this world” maps.

Copenhagen – in this life  – is north of Germany, not West.  But perhaps that is how or why we have such a strong collective concern about crustal shifts, about Charles Hapgood’s theory, and all the rest of it.

It could be “print through” from a life/place where it has already happened.  Or, not.

The second reason for mentioning it is the odd lack of computers in my dreams.

Oh, sure, there are some basic electronics; steam gauges is what we pilots refer to old-school instruments as.  But thinking back, not a single LCD or television has appeared in one of my dreams in 60+ years, as far as I can remember.

And that’s where I was from 4:25 until 4:34 this morning.

Are dreams telling us something very important about robotics and computers?   Like “They are very bad for you and given enough research, they will learn to hunt and kill you”?

I’m sure you saw the story last week about a new Russian combat robot being on display and a month or three back, there was the quadruped the US military is interested in weaponizing.

Read More

Repondering Gold

Fine weekend – of work, I’m sad to report.

But  I made some real progress on three of the biggest economic questions out there.

1.  Is there anything meaningful about the gold withdrawals that took place from the CME on Friday?

2.  If there an adaptation of on-balance volume that would be integrated into our already marvelous Peoplenomics Trading model?

3.  And – is it true that the whole of the accounting profession will die over the next 10 years?

The answers to #’s 2 and 3 will be laid our for Peoplenomics readers on Wednesday of this week.

Which leaves us with coffee and the CME warehouse numbers from last week to ponder.  The most important two banks to consider are HSBC and JP Morgan-Chase.

So, what does it mean?

Is a bottom in gold likely here yet?  Or, might something else be going on?

Damn fine question, that, but we don’t really have enough data to know but we can speculate in both directions.

First a word about size:  270-thousand ounces is a fair bit of gold – a third of a billion dollars worth, but is it REALLY that big when compared to how much gold there is in the entire world especially when you count government holdings (like Fort Knox) and all that gold Germany has, but which are are politely not giving back to them

The simple answer is no. 

The CME warehouse number as of Friday was  7,572,284.933 ounces.  And if you multiply that by this morning’s spot price, it’s enough to buy something other than a steak and eggs breakfast. 

But does is mean something might be going on under the surface in gold?

Theory #1:  (With credit to my consigliore who also was working on this Sunday):  It is possible that the marginal mine operators are getting nervous about the price of gold.

As you will remember, many of the gold miners sold their gold forward at pretty good prices in order to increase their staying power and lock in long-term profits.  The bad news for them was that many of the junior and marginal players missed out on substantial profits when gold was up around $1,800, but that was long ago and far away…

The reality is than many of the marginal miners are getting to the point where they will have to start shutting down operations if things keep getting worse on the price front.  But, since they have gold mines, their credit it good, interest rates are low, so why not buy up physical gold now to keep it off the market and then parcel it back into the market when prices solidify a bit?

I mean, this is the kind of thing that happens with diamonds, as anyone who follows the gemstone world knows.

Theory #2:  This one is a little different.  This is the one I call “Ure’s Crackpot Low Rates but Screw It Let’s Get Rich Anyway” model.

Here’s how it works.

Let’s say that we have a big hedge fund and we can borrow money for 1/2% interest.  We know that at some point the Fed will be raising rates.  We also know that housing costs are going up 2% now and Food costs are going up 3% and at some point, energy will turn around, too.

So, what we we buy (cheap) and “own” which will go up in value, has relatively limited supply and which could have a price pop?

One answer is gold.

If I can borrow money at 1/2%, a thousand dollars of gold today will likely be worth around $1,030 next year.  My cost for holding the gold for the year would make its cost $1,005.  Which doesn’t make sense.  I mean a little money, sure, but no new airplane, or house in Cuba.

Until we use leverage of 10:1 in the ownership.  In this case, my gold is then $10,000 worth today.  My interest cost is still $5/thousand but let’s say it’s 1% overall…because I have to pay something to borrow more and pledge the asset.   But the gold in a year would be worth $10,300…and about here I wander off into a blue cloud of daydreams.  $100 costs and $300 profits is the stuff to thrive on. 

You’d do deals like that all day long, if you could.

But does 270-thousand ounces mean anything else?  Like someone trying to corner the market?  No.

Buying up 3 1/2% of a market as big as gold isn’t happening, despite what a few bold bugs would love me to write. 

But will gold ever go to zero?  Likely not.

But would these be interesting times to see marginal players getting desperate to keep their mines going when forward contracts expire, or when big hedgy guys are looking for ways to “salt the turd market” a bit?

Yes.

Or maybe, someone with a few brains who has read the US Public Debt to the Penny – which has been artificially paralyzed for a while – would follow the Baron Rothschild axiom to buy when the blood is running in the streets.

Although it won’t be allowed for civilians to play as we recently warned subscribers that there are increasing references in regulations dealing with money laundry/anti-terrorism  rules, to limit this game to only the big players…not scum of the earth sheep with a few coins as a hedge against crooked government.

Times coming when anything outside the system will get you branded with a big T on your forehead.  ‘Specially  if you dare to support candidates other than the Orthodox Corporate Party Put-ups.

Collapsing Oil, Texas Troubles

In theory, anyway, the gold miners have a tremendous leg up on the hapless guys in the oil patch.

Oh, sure, North Houston is still a traffic nightmare, and sure, Shell is still building a big campus and all, but the price of oil is collapsing again today and down into the $46’es.

What that means is simple:  Interest rates are not coming down, so the last of the little guys in the oil patch are likely to have one hell of a time keeping on with operations.  Which means the bigger fish – with deeper pockets – will soon be able to gobble up resources at bargain prices and salt it away for the future when depletion comes along with aggressively.

There’s a story in the Tyler, Texas paper about how oil production could be about to reach an all time high.  But remember that the peak in production will be followed by a bust when comes to jobs and Texas is known for a cyclical economy.

The reason for mentioning this is that it has taken a new generation of technology – and we are just now coming back to production levels set in 1972.  As Oilman2 is constantly reminding me, you can jack up production short-term, but long term, the rolling peak is likely here.  And my work in the Manufacturer’s Resource War scenario backs it up.

It’s just going to be a matter of what the fighting breaks out over:  Real estate, food, religion, oil, foreign exchange rates, made-up money, repudiated debt…  it’s all going on the table and it’s all contentious.

For Texas, the downside is rearing its head and all the happy-talk in the world won’t keep the juniors from being eaten by the majors, as happens with each cycle.

Personal Incomes and Fairytales

Not that it shows up yet in the Personal Income data just out:

“Personal income increased $68.1 billion, or 0.4 percent, and disposable personal income (DPI) increased $60.6 billion, or 0.5 percent, in June, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $25.9 billion, or 0.2 percent. In May, personal income increased $66.3 billion, or 0.4 percent, DPI increased $53.8 billion, or 0.4 percent, and PCE increased $90.8 billion, or 0.7 percent, based on revised estimates.

Read More

Coping: The Library Without Walls or Books

Elaine and I are pretty serious about downsizing our lifestyle.

Natural thing that happens with age, and all:  More than one level and more than one acre will – over time – become a bit more to maintain than we feel like.  The difference between quaffing beer or sipping 18-year old scotch.

Part of the problem, of course, is that we like books.  All kinds of books – all kinds of topics – and we love them all.

Pick a topic and we can probably find some guidance on it. Over a thousand to pick from.  Not that we don’t trust the machine age and electronic books (we’re a three Kindle household, plus an Echo to see how voice technology goes…).  It’s just that electronic books have not yet been taken to their full potential.

Microsoft Office  has much better information-conveyance possibilities than does a book.

As good as our Kindles are (2 Fires and a Paperwhite) they still lack mastery of one thing a physical book has:  Thumbing.  Somehow, the man-machine interface just doesn’t have this one down yet.

Give me a physical book and I can hit the information I’m looking for in just seconds.  With a Kindle, it could be many, many minutes – and that’s provided I don’t get bored swiping or trying to find an indexing answer.

Often as not though, the indexing strategy is difficult to articulate into keywords or locational searches and often only fits the “I’ll know it when I see it…” criteria. 

When thumbing – which isn’t even primarily a thumb – that happens quickly.  You can get a sense or recall how the information in the book was laid out – it’s a feeling.  Thus,,in a good book, quickly defines the location of the desired details are located.  It’s magical.

Well-written books are a joy this way; and it’s a key part of why the translation from paper to the portable document file (.PDF) format is still lacking.  And, since Kindles eat a proprietary semi-clone of .PDF files, the problem has followed there.

Not that we don’t like Kindles, though:  We have hundreds of books on them, too.

Initially, books have been limited to the .PDF format by one thing:  memory size. 

However, now with the age of cloud-based resources handy, there’s no reason not to have a much more robust, engaging, engrossing, and communicative kind of “book” out there.

By communicative, what I mean is many of the books I’m reading of late, such as a reread of Joseph Granville’s work on on-balance volume’s importance to stock trading, could be much more rich.

Here’s how:

Whether you’re talking Granville (or my other favorite book Technical Analysis) the authors of such books insert a chart that shows some occult stock market concept, say “flatbasing” in Granville, and then insert a chart that shows the concept but then completely stops.

Not that a chart shouldn’t have a right axis to it… of course it would.

But in this Book2 format I have in mind – to pin the tail on the concept – the right end of an  example chart would be extensible.  So a chart that in a commodity, for example, that covered from June of one year to June of the next, could be expanded with just a finger move, or two, to explode into a multi-year chart.  Or narrowed to a single trading hour.

For me *(and you too, more’n likely) this would add a whole new dimension to chart work.

And this format “Book2” would also have incredible applications in the field of medicine.

I don’t know if you have been following it, but it is just coming out that while the Centers for Disease Control has historically claimed there has been no connection between autism and vaccine administration, the reality is coming out that a couple of highly placed bureaucrats are actually alleged to have censored the data in order to skew the results in an attempt to continue vaccine use!

This story started to break on InfoWars a couple of days ago under the heading “Bombshell: CDC destroyed vaccine documents, Congressman reveals.”  Related is the C-SPAN video over here which is on the must-watch list.

Now, let me explain how “Book2” could go a long way toward not only giving the public better  books to read, but also more honest research.

For one, the Book2 concept is rather large – like extensible XML.

In the case of medical studies, the core functionality improvement of the Book2 format would be that all study data could be forever inextricably linked to any book on medicine.  In other words, all the MMR vaccine data could be preserved.

Not only that, but the Book2 format would include a more comprehensive list of sources of data as well as who provided funding for a book’s creation.

In the case of vaccines, it would be very interesting to have books that link snapshots of audited financial data of the authors as a detail of the Book2 format.  Why?  Well, take books on any disease you can think of and then ask yourself, “Who would stand to make a buck off this research?”  To my way of thinking, this sort of thing ought to be included with the basic book material, as well.

And there’s the rich media aspect of Book2 content.

Think about this:  How many books have been written about music, composition, artists, photography, film direction, actors and actresses, and on and on – right down to brush strokes in painting – that are completely devoid of any active content?

Yet with a cloud-enabled Book2 format, we could have all of these things:  Voice responsive lookups with the Amazon Echo, rich media delivered to that Retina display or 4K screen, active underlying data sets, rescaling of charts, re positioning of drawings, examples of music and art down to the detail level, and in the case of hard sciences, even online zooming electron microscopes to show varying levels of detail that is not possible in the flatland of books.

The technology is not here, yet, but imagine a book with smells:  The salt air of the open ocean for that sailing book, or the smell of the stable in that horse grooming book.  Wind and water in the face during Hornblower; heat and dust in Lawrence of Arabia.

XML’ified information to better engage a wider range of minds, and thanks to translation engineers, easier (OK, instant) transliteration to share cross-cultural experience..

Information and intelligence, whether we like it, or not are topological phenomena.

The idea that there is a real Bell Curve to the distribution of intelligence is a fraud before a nation of simpletons.  For everyone’s brain is not a singular line – a curve.  Rather, it follows a topology such that a  a person who may “line out” in one standardized test may in fact be a Chopin in music.  It wouldn’t be evident without a music test, though, would it?

Wheeler in physics, or a Rembrandt in art.  The “curves” don’t adequately capture the topology of genius because testing is almost universally a bad average based on limited scope questions in the first place.

A final note on the Book2 format:  It increases the ability of an author to create compelling content.

I can’t tell you how many times in my novel (DreamOver) which is still pouring of the fingers in dribs and drabs, I have come up against the hard limits of the written word.

Not that I can’t do it – of course I can.  I learned long ago that writing is the art of drawing a picture with words – and hopefully the words properly-chosen will create roughly the same image in your head, as I intend.

But that world of flat bookery is going away.  The library systems as we know it are being virtualized.  Gutenberg, Amazon, YouTube and Vimeo…there’s a progression only a fool could miss.

My little sister is going to a library opening in a week or so, having been on the planning group at one point.  New libraries sound like a nice thing but I didn’t have the heart to tell her they are an artifact.

But it got me to thinking about how things have changed since all three of us siblings worked as “pages” *(book shelvers and tidy-uppers) at the Seattle Public Library when we were in school under the tutelage of Mrs. O’Brien who knew more about information that even many of today’s cloud engineers, I daresay,.

It was a delightful conversation, but it reminded me of the world we live in.

You know:  The one where some day the last order of fish & chips will be eaten.  And the one where books will eventually be rich-media events so that knowledge can be more readily consumed.

By people not damned to a life, defined by a line, that misses the beauty of the topology of us infinitely potentiated primates.

In the past, America’s great industrialists built massive free public libraries.  But where is the echo today?  The fortunes of Gates and Ellison and Buffett do good works, don’t get me wrong.

But the previous age of industrialists left a legacy of minds and seems to me that promotion of a Book2 extensible authoring framework to include more source, more media, and to provide accessibility and extensibility to new technologies would be a worthy legacy.

Still, to prove the point (how poorly we adapt to the future), do you know what Amazon still sells?

The Weaver Leather 5 1/2FT BUGGY WHIP BLACK.  And less than $15-bucks.

Read More

Thanksgiving Flash-Bang

This morning we go a-futuring…a futuring we go…

And who is this somewhat obscured fellow off to the right there?  (Unless you’re dyslexic, of course, in which case that’d be your left.) 

Why it’s none other than Lemony Snicket!

And…what’s this?  A big speed bump in the road during the Thanksgiving recess of Congress! 

How, pray tell, does all this fit into Long Wave Economics?

This morning we will examine one possible future that answers these and a lot more questions.  One that fits market wave counts, defense deliveries, and no one home in Washington.

Read More

+ More