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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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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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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In spite of various market predictors putting up charts espousing a replay of 1929 is imminent, a more measured view of long wave economics argues that we won’t have an economic collapse/crash until April 17, or thereabouts.   We’ll get into the “blood and guts” of why this weekend for subscribers.

But the main thing to be aware of this morning is that on our Peoplenomics side of things,  I developed a trading model.  And for a number of weeks it has been saying “new highs ahead in the short term.”  Advice I promptly discounted thinking the methodology that I’d put into the model was somehow flawed, has been amazingly right.

Even if the present rally in global markets peters out right here, the earliest likely market crash window would not come until around April 17th.

This timing suggests a lot of things…and one biggy is that we should see an agreement among the EU/US/Russia to begin talks on the future of Ukraine.  That would likely be struck in the next week or two.

And if that gooses the markets to new (nominal, but not purchasing power parity) highs, then the crash window could be delayed into May.

And here we are, on option expiration day for the month, and the Consumer Price Index hasn’t gone roaring to the moon.  And The Conference’ Board’s Leading Economic Indicators  is just about as rosy as could be:

The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.3 percent in January to 99.5 (2004 = 100), following no change in December, and a 0.9 percent increase in November.

“The U.S. Leading Economic Index continues to fluctuate on a monthly basis, but the six-month average growth rate has been relatively stable in recent months,  which suggests that the economy will remain resilient in the first half of 2014 and underlying economic conditions should continue to improve,” said Ataman Ozyildirim, Economist at The Conference Board. “Correspondingly, the U.S. Coincident Economic Index, which measures current conditions, has continued rising steadily.”

Markets, globally, seem to agree.

Overnight, the Japanese market “went helium” rising nearly 2.9% and the Chinese chipped in for better than a 3/4 of one percent boost. 

And, it’s carrying over into Europe, as well.  In the early going there, small gains were being reported in all three major exchanges – England, France, and Germany.

Despite this, our proprietary Global Aggregate Index was holding in the vicinity of  29,116.  In order for us to get comfortable with getting seriously long, the Aggregate Index would need to beat the recent high  29,234.27 that was set the week ending January 24th.

Otherwise, there’s a fair-to-middling chance that the markets are doing a classic double-top formation and from that, a major decline would be possible. 

Most of that is likely to be determined not in today’s options settlement, but in how market participants reposition and hedge their bets next week and beyond.  And that, in turn, should hinge on developments in Ukraine.

With the Sochi Games wrapping up Sunday, we’ll be keeping a very close eye on how Russia plays events as the window for headline-grabbing (and western-inspired?) “terrorism at the Olympics” comes to a close.  that “judging” story in Sochi  is down in the noise floor around here.  BS and distractions to all but the ardent true believers in sports.

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I assume you know that the death toll in Ukraine’s latest revolution is now heading up toward 50?  This as the peace talks and truce worked out last night blew up on the streets, but there’s good reason for that.

As I’ve been saying, it’s a three-way international power struggle.  The US is backing one (violent) right-winger.  The EU faction of the Enterprise is backing another, and as soon as the Sochi Games wrap up, there will likely be some “friendly” Russians showing up in Ukraine (like advisors showed up in Syria) all countries are failing economically and need the jump-start that only a war can provide.

This isn’t the first time Ukraine has “blown up.”  Here’s the list:

Khmelnytsky Uprising (1648–1657)
Ukrainian War of Independence (1917–1921)
Declaration of Independence of Ukraine (1941)
Orange Revolution (2004–2005)

Meantime, our news analyst fellow up in Winnipeg as be following the tweet storm which accompanies headlines like that other Russia/West showdown hotspot Syria…

The enemy is at the gates. While perhaps a discouraged activity at a dining hour, Twitter browsers can digest the musings of a Western jihadist in Syria, @Fulan2Weet, Sadly there are many more of them. Questions may be answered at the Latvian-based website Ask dot fm/Fulan2Weet. Commentary from @VancouverExpat (“revolution until victory”) is maybe no less disquieting. Should the traitors in the field defeat actuarial odds and return home, one could well imagine their Sunni disposition being clouded by others not conforming to the “faith”. Time to consider thoughtful reaction, but perhaps not time to waste?

Regards,

Of course, who the enemy is depends on which side of the gates you happen to be on  – in which West/Russia showdown country – and whether your promise of power is coming from the EU megalomaniacs or the think-they’re-smarter-than-Putin folks in Washington.

When we get past this weekend, and Sochi wraps up, look for things to really heat up.  And one of our designated smart guys says the market collapse date is March 10, which is a Monday.

Meantime,  Robin Handler, who publishes the Options Signal Service,  penned a pretty good observation in his overnight report  (“Another Red Flag” here) that looks at the scary language shifting about and spilling into financial stories now.

We’ve been using language (and cycles off the Fine Structure Constant to make predictions like the pending terrorist attack that came true in Nigeria with an attack this week that killed 47. Overshadowed by events in Ukraine, but only for now.

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At last!  We arrive in a week which is just about perfect.  I have a birthday, the Presidents have an event in my honor (well, sort of) and we don’t have to work “five for the Man.”  Oh, and as a bonus we get all kinds of economic data, which is interesting because we will again see how audacious the hype about “recovery” is.

The core problem in the word is we humans are running out of jobs.  Which is why the US labor participation rate (through current data) continues to decline.

There are plenty of reasons for it:  More stay at home moms, the LBGT movement, job-jacking and offshoring, and the BIG ONE that no one is ready for:  Massive workplace automation and the replacement of humans by machines.

Against this backdrop “White House touts stimulus as Americans see ‘unemployment’ as nation’s new top challenge…”

The reason this is so HUGE is that all modern democracies are based on the idea of people “must do things” in order to “get paid” and this is what the worldview is based on.  We don’t reward good…we reward…well….work product. 

Unfortunately, most people are sleeping through the coming “End of Work” that I’ve been writing about for years for Peoplenomics readers.  And it’s starting to spread.  Kick-ass article over at ReadWrite this morning talks about the revolution coming in 3D printing that will allow a super-sized machine to “print” a 2500 square foot home in just 24-hours.

So much for the remnants of the building trades, huh?

Still, there are few people who grok the whole disruptive technology thing.  In fact the Defense Advanced Projects Agency (DARPA, the folks where the Internet came from, not Al Gore, remember then?)   has set up a Disruptive Technology Office because people in the intelligence community at least have the inkling of massive change.

The problem  at least so far  is that most companies and almost no people have no plan how to deal.

Let’s roll back the clock and pretend it was 1990.  How many companies outside of silly-con valley had a long-term strategy for web dominance?  Oh, about zero, give or take.

Inertia and change-resistance kills.  Except if you thought change from networked computing was something, you ain’t seen nothing yet.  Wait till I can email you a steak to be printed and eaten.  Then you’ll maybe get the idea.  Ever think through what happens when every grocery store in American just ‘prints’ your order?  Stockers, clerks…oh my head hurts!

While we wait…and it shouldn’t take more than 10-20 years for the 3D wave to crush everything in its path…we will have lots of research to ponder this week.

The Consumer Prices are due on Thursday. In case you haven’t noticed, groceries are going up.  It’s become so obvious that outfits like CBS are noticing how  grocery costs go up as incomes stand still.

Tomorrow, there are Producer Prices, which used to give a pretty good indication of what kind of inflation was in the pipeline.  However, most economic press releases have been jiggered, corrected, seasonally adjusted, and basted with a creamy lemon-pepper marinade, that they don’t mean much of anything anymore. 

Even the stalwart Consumer Prices don’t use the same meats, the same veggies or any of that so our food prices today are very much like comparing apples and oranges.  The statisticians will tell you that is because hedonic pricing is real, people change their consumption based on new information (fad diets, high veggies, low carb, low veggie high protein…you see them come and go) and so the statistician can make up damn near anything and sell it.

Which gets us around to this morning’s first dart:  The NY Fed Empire Manufacturing report.

A few words from it….

“The February 2014 Empire State Manufacturing Survey indicates that business conditions improved marginally for New York manufacturers. The general business conditions index fell eight points, but remained positive at 4.5. The new orders index fell to about zero, indicating that orders were flat, and the shipments index declined thirteen points to 2.1. The unfilled orders index remained negative at -6.3. The prices paid index fell twelve points to 25.0, pointing to a slowing pace of input price increases, while the prices received index climbed two points to 15.0, suggesting a faster pace of selling price increases. Employment indexes were little changed, indicating a modest increase in employment levels and slightly longer workweeks. Indexes for the six-month outlook continued to convey fairly robust optimism about future conditions, even as the capital spending index fell ten points to 2.5, a multiyear low.”

And the further details are over here.

So with this to look forward to, the market is expected to be cautious, though it’s not this week we’re worried about.

Of course, I’d be remiss if I didn’t mention how the Japanese Yen dropped overnight and how this means Japan is in the same “print at all costs most” to keep deflation at bay.

What the central bankster class doesn’t want you to know is that global synchronized inflation to offset pernicious deflation and Global Depression is the only game in play that matters. It’s why the metals have been strengthening.  Still, one more good leg down is likely later on this year when deflation kicks up as housing softens again, but one day, one month, one year and one report at a time.

Dow is about flat…metals too….looks like a Monday but it’s really a Tuesday…

Dead Banker Tracking

Report of a jumper off the roof (18 stories up) off a building in Hong Kong this morning where a bank is located.  Another banker death?  Don’t know that yet…

More after this…

7 Days to ????

It’s NEXT WEEK when the Sochi Games wrap up and Russia can begin to flex its muscles against the Western bid to steal Ukraine from the Russian fold.  And, since a good offense is one fine defense, look for blow ups in places like Iran or Syria.

And, in case you didn’t notice, Iran is now saying that Russia could build (another) reactor in exchange for yet more oil.

This is something that will leave the EU fit to be tied because Russia is already within sprinting distance of achieving energy independence.  It’s Europe which has been pretty well cleaned out of energy resources and they, in turn, have been talking very much an aggressive line against Russia of late.

When you read headlines like “Two former members of Pussy Riot detained in Sochi, Russia” just remember it’s not about rock & roll with a message.

Greed – and the demands of the Manufacturer’s Resource Wars – demand that the US/West go hard after Russia because there are only so many places where there are resources worth fighting over.  One of those places is Russia and the megalomaniacs of the EU have (*stupidly) tipped their hand early.

Putin gets it…and busting Pussy Riot (and some ex’es now) is a clue about how serious he’s going to play.

By the way, in light of the failed Syria peace talks in Geneva, pay attention when Israel’s prime minister says Iran is the only winner from nuke talks with Russia.  The fates of Syria and Iran are tightly bound, since Syria is a forward aircraft radar post for Iran and Israel is always looking to the north-northeast…

Waiting for the World To End?

A bunch of minor earthquakes…including one in the Southern Caribbean area… 6.5 down off Barbados.  But after that you’re down into the 5.6 and lower noise floor. So, if you were expecting a report that the world is about to end to keep you from having to head in to work today, time to shower and get a move on.

Sorry…but there was one glimmer this weekend as a huge asteroid zipped by.  But only a near miss so it doesn’t get you out of getting your taxes filed, either, does it?

Still Winter

And so, yes, it is still snowing some places.  79F here at the ranch yesterday.  Here come the bugs and snakes… I’d take cold weather, a hot drink, and whatever’s behind curtain #2 any damn time.

Get Al Gore on the Line!

Tell him Antarctic Sea Ice Extent still 25% above normal.

Global charlatans, you think?  How about a website charlatans.gov?  Gimme a break…

New York Rebellion?

Gee, I thought the Texas independence movement was an outlier.  Here comes a secessionist movement in New York.

It does get us to thinking about city-states….and other candidates might include Rahm’s Chicago and whatever you want to call that area south of the Grape Vine.  Lost Angles or something like that…

Air Traffic Hiring

Scary headline at WorldNetDaily this morning “FAA: ‘No Experience Necessary’ for air traffic control” isn’t exactly how it works.

Yes, anyone can apply and many will get hired, but the real deal is that the FAA has warmed to the idea of flight following for private aircraft and it enhances safety of the whole system.  And Houston departure is not putting someone on a radar who just walked in off the street on a console. 

The training is rigorous and very demanding.  The story is true, but the impression if might leave?  Well, that’s something else again. 

Conversations like…

“November 7912 Lima, radar contact  4 miles northeast of the Palestine airport, Squawk 6723 and ident.

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