Countdown to Terrorism

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.

Read moreCountdown to Terrorism

Coping: With Noodle Economics

One of your readers, Ken, has a pretty snazzy way of explaining how something as complicated as economics works:

“The story I used to describe how the economy works to my grandkids is this.. the economy is like a table with a puddle of water on it.. if you place a noodle on it..( money) and buying and selling is equal (the water) then you can push the noodle back and forth..

Now take a wet noodle..( printing more money) and put it on the table.. as long as there is plenty of water for the cooked noodle to float in you can push it back and forth .. a little bunching here and there but it will move.

Now the economy starts to dry up.. ( increase of fuel prices, reduction of home and car sales, loss of durable goods sales, etc.. and people start shifting their money to another avenue like from buying durable goods to buying fuel or food..( double insert here.. decrease the amount of money being allocated for food stamps..

Read moreCoping: With Noodle Economics

About Our Website Changes

A special Sunday note here: What a weekend so far(!) The good news is that I have gotten most of the changes done and if you’ve gotten this far, you’ll be pleased, I hope with the results. I don’t like change, anymore than the next guy. Especially when it involves rolling out of bed at 3AM and working like crazy to make sure things happen in as seamless a way as possible.

Historical Changepoints

Just posted for subscribers: A number of readers have asked me to write about how what’s come to be known as “prepping” helps a family to prepare for an economic depression. You know another one is inevitable, I assume: It’s what happens when the USA is forced to devalue the US Dollar because despite made-up statistical changes to our reported GDP numbers aside, the fact is that we’re quickly approaching the debt saturation point where we won’t be able to even make interest payments – let alone principal payments – to our creditors.

Coping: A Manufactured Ammo Shortage? Ha!

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.

Read moreCoping: A Manufactured Ammo Shortage? Ha!

Your Country Is In Trouble When….

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.

Read moreYour Country Is In Trouble When….

Coping: With the Reality of XKeyscore

It’s not very often that we nail use-case and software development as accurately as this, but  a couple of weeks ago I wrote up for readers [SUBSCRIBE] how to develop a scoring algorithm for electronic surveillance of an entire country.


After you go here and read how “NSA tool collects ‘nearly everything a user does on the internet‘ come back here and read how such systems, even using meta data, can pose a serious risk to personal freedom.


In the interest of wider public discussion, here’s the “How it could work” part of that Peoplenomics report from July 20th:


— Peoplenomics extract —


“Let me run through an example of how this can work.  As a practical matter, the first thing you’ll need will be a huge government data center. As luck would have it, exactly such a center is now under construction in Utah. In terms of what will feed into this megalithic computer empire, we already know that bank and credit card transaction information is likely to be there, metadata about cell phone calls and possibly landline communications as well.

As long as we’re at it, let’s also toss in a real-time feed from Google which can be traced back to your Internet protocol numerical address. That could give government keen insight into the kinds of websites we’re visiting, which in turn will reflect our personal tastes and philosophies of life.  Sexual peccadilloes, too, if any.

In the book I begin with the example of a John Doe who wakes up to the sound of a colleague from work calling him on the phone.

“Hello, this is John, who’s this?”

“Hi John, this is Abu and services in IT at the office, and I wanted to talk to you about your computer. You know, I have been working on it and I would like to have your permission to backup your hard drive over the Internet because you’ve apparently had a head crash at some point and you’re experiencing errors. Would that be okay with you John?”

“Well, sure Abu of course you can and thanks for calling. I have some pictures of my wife on their from her birthday party and I wouldn’t want those to get lost, but you guys in the IT department do what you need to do.  I’ll be in early on Monday in case anything needs attention that.

Read moreCoping: With the Reality of XKeyscore

Colors of Money

Although I can fairly be accused of being something of a whiner about how the US economy is managed, I’m usually right more than 50% of the time in the end. And president Obama’s likely nomination of Larry Summers, if it happens, likely would improve my batting average even further. Nevertheless, I’ve come up with an idea this week which would – at a stroke – make congress, the White House, and the American people seem 50 IQ points smarter when it comes to money and economics overnight.  While you let that one roll around in the noggin, we’ll stop to smell the headlines and the coffee…Say, did I mention growth sucks?

Read moreColors of Money