A GroupThink Project: Sectorial Dependencies

[Long report warning: >7,000 words] When someone says the word “GroupThink” I’m sure that there are some negative connotations. But in this morning’s context the term “groupthink” is not a bad thing since we’ll to be using it to help (as a group project for our mutual benefit) to come up with a different way of looking at financial data. Specifically what we’re after is to define interlocking dependencies which can then hone our investing returns not just in the market but also in day-to-day decision-making about life in general. Before starting this new look into mechanistic causality in complex systems though, there’s nothing to starting the day with some headlines as we wait for the idiotic mainstream press to deliver word of the first royal diaper being filled.

How’s Your Weenie?

You know column writing has crashed in the summer doldrums when something as obscure as National Hot Dog Day is our lead item.  Yet with markets stuck in “noise trading” (futures are up a dab, gold’s back to $1,330 and Bitcoins are around $90-something) other than rejoicing that oil is back down to $106) there’s little to write about.

 

Still, it might be worth dropping by a 7-11 or Sunoco to see if they are giving out freebies and buying a drink while you’re there. Dollar dogs at Sonic, too.

 

National Hot Dog Day seems a uniquely American counterpoint to…

International King in the Wings Day – July 23

All of Britain is worked up, or so the mediafest seems, about the arrival of 8-pounds, six ounces of someday king material.

Which gets us back to the problem of writing something clever (heavy on the ‘kraut, please?) to say about Wall Street and somehow tie it in to today’s momentous occasion. 

 

I bet you didn’t know that Los Angeles consumes more hot dogs than New York, but Chicago’s O’Hare plane hoppers eat more dogs than La Guardia and LAX combined.  Here all this time I thought it was the pizza on C concourse.

 

This is also National Vanilla Ice Cream Day and you might enjoy playing Stump the Docent at Monticello by asking when Thomas Jefferson wrote down his vanilla ice cream recipe (mid-1780’s).  Sunday was National Ice Cream Day (all flavors).

 

Maybe this is what an economic “recovery” looks like.

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Coping: Time to Eye the Exit?

The case of the Missouri man who got a $1,000 find for flashing his headlights at oncoming cars to warn them of a speed trap up ahead is just one of the small evidences that America seems to be on the verge of becoming “Police State Lite” [PSL] without even giving the grave nature of events due consideration.

 

You may remember a week, or so back, I mentioned an email from long-time reader John who found fault in my report to you on several counts:

 

“Hi George,

 

You’re slipping a bit. You listed some seriously erroneous info today regarding giving up citizenship. See below.  

 

“Remember Cyprus?  Offshore banks seem to be worse than our own.  And besides, the US authorities claim 10-years of  authority to collect taxes from expats even if you make it out the exits.  Not to mention there goes Medicare and Social Security income, too.

 

Please note that the renunciation tax law was given a major overhaul in 2008 due to the HEART Act. 

 

The 10-year tax regime was replaced with an exit tax on the expatriating citizen, which only applies to people with a high net worth, over 2 million dollars. Thus, you are making a clean break from the system.  

 

Renunciation does not affect your eligibility for Social Security and Medicare, that is, unless you went to a country that is considered an enemy of the U.S.

 

Bye, John (very long time reader, subscriber from both sides of the Atlantic over the years….) “

 

As usual, when I get a correction like this, I make the most of it since it serves to remind me that I’m not (quite yet) invincible and to remind myself that where there’s a will, there’s a way…

 

Which brings me to point #2:  My friend Bruce down in Ecuador has set up a dandy bed and breakfast operation which features friendly amenities and low enough price to live so that a person could hang out in Ecuador for a good long time.

 

HIs place is called Casa Marilla (Yellow House) and it’s located in Vilcabamba, Ecuador.  And it got me thinking long and hard enough about the possibilities to send Bruce a note inquiring as to the price:

 

“Price is $400-450 for 2 bedroom,  $600 for 3 bedroom, completely furnished.    Internet is available for $35 a month. 2 gigabit speed.”

That’s per month, no less.

 

So yes, we are thinking about the exit now and then…

 

Hollywood Accounting

Reader Chris is a little disturbed about the short-term media coverage given to low initial takes on some films…which turn out to make money (lots of it) in the long-run:

 

“Hey G  

 

I Read the Disney Story on The Lone Ranger Tanking.   It seems that accurate Journalism is no longer necessary. Or…only money made in the U.S of A. counts, I’m not sure which.  

 

Here is the author’s statements  

Depp’s recent non-“Pirates” movies have bombed. Not counting “The Lone Ranger,” 

2012’s “Dark Shadows” cost $150 million but grossed only $80 million, 

2011’s “The Rum Diary” made $13 million on a $45 million budget, and that same year

“The Tourist” tanked, recouping $67 million on a $100 million budget.  

 

These are the actual worldwide figures, not including DVD and blue ray sales  

 

Dark Shadow   $238,727,14  

The Rum Diaries $23,947,544

The Tourist   $278,346,189  

 

Hell, and we wonder why media isn’t doing stories on things that count.  It’s because they can’t even Google for a fact.   Remember the days when the boss expected you to back up your figures.   I wish there was a fine for this kind of CRAP. “

 

Fair point, there.  It will be instructive to see how the Lone movie does over time.  One thing that is going on are stories wondering whether Johnny Depp’s career is in jeopardy.

 

Movies always were – and will continue to be – a team outcome.  One big name superstar can’t save a movie with lose parts elsewhere, yet the pile-on crowd seems intent on ignoring team play…

 

Around the Ranch:  Summer Power Failure

Along about  4PM, Elaine wandered into the office.  “I see you’re not effected…nice and cool in here…” 

 

“What, is the power off?”  It was the only question that made sense.

 

Well, one thing led to another and yes, we had a longish power outage which came back on a couple of hours later.  But it’s a reminder that solar power is a good thing when the sun’s still out and it’s 95-degrees outside.

 

I still think investing in insulation and renewable energy will, over the long term, out perform any currency out there, especially if you connect it to some kind of gardening project.

 

Life-Long Learning Note

Here’s an interesting note passed on about a new project called Flooved over at www.floved.com.  The idea is online mentoring/teaching and you can click on the “How it works” tab to learn more about it.

 

Maxa-Cookie Manager

A number of people have inquired as to whether Maxa Cookie Manager works with Windows 8.  The answer, says my friend Manfred at Maxa is yes…and I’ve been running it fine on my laptop with Win8 since I converted it from Win7/64.

 

If you’d like to sample how it works, click here and download it and follow the setup instructions.  Most people are amazed at how much crap there is in the way of tracking cookies on their computers and how much faster their machines run in many cases when the tracking cookies are taken out.

 

They also have some interesting online encryption tools and a nifty Privacy Test you can run to see just how “open to prying eyes” your computer is….

 

Manfred and I are talking a lot about security issues and privacy lately, so one of these days I will write up details for Peoplenomics.com subscribers…

 

Write when you get rich…

George Ure (george at ure dot net)

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A Course in Surveillance Algorithms

An algorithm is simply a set of instructions for a computer system to follow in a particular order.  In the case of Big Data, the steps are capture, organize, integrate, analyze, and act.  Using this approach, we can build a fine example of the many trip-wires an innocent civilian could stumble over in the modern surveillance society.  Plus we have our monthly check of west coast port data with is oftentimes a decent truth detector about the economy and an update on many headlines and our trading model.  You may need a third cup for this morning’s report…

 

 

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Waiting for News, Adios Egypt

The market was set to open a tad higher this morning as last week’s frenzy has had a weekend to wear off or sober up.  The first news out this morning will be existing home sales at 10 AM but nothing exciting until later in the week when Durable Goods come out and that ain’t exactly a heart-stopper.

 

The reality is that genuine news takes a little time to work its way through the system:  We told Peoplenomics readers this weekend that monthly West Coast Port data for June showed a 3% slowing of imports, which is not the kind of thing to see if there’s a major recovery underway.

 

Moreover the price of oil is apparently not coming down. It was over $108 this morning and that means prices are starting to move upward slightly but the full impact won’t be felt until the 60-months of propagation/knock-on effects have time to develop systemically.

 

Behind the scenes?  Oil goes up, and this enables the Saudis to put $2-billion into Egypt to help keep that country from imploding.

 

What’s going on?  You might want to read the George Packer piece in The New Yorker magazine this morning before I tell you.

 

But the short answer is?  The Saudis have just out-bid us while we’re arguing internally.

 

If you consider international relations just like you’d assess a leveraged buy-out, many of the same dynamics are in play.  Power of the First offer, for example.

 

When the US talked but then dawdled, the Saudis were patient but in the end, faced with indecision from the Obama crowd, they stepped up, placed a $2-billion dollar down payment and now have incredible street creds for helping keep Egypt from imploding.

 

Like I said:  Outbid.  Signs of crumbling empire, my fellow Roman.

 

Meantime, gold senses this price action and has firmed back over $1,300 and the strong showing by prime minister Shinzo Abe’s part in Japanese elections this weekend mean a continuation of Abe-nomics.

 

Even this little glimmer quickly faded in Europe this morning when things are mixed and so in the interlocking world of linked markets a flat to down day by the end may be expected.

 

The Big Picture problem, the decline of 10-year bond yields since July of 1981 is still the same.  And there’s still plenty of time to  buy inflation hedges for when the long term trend reverses, but patience of a year to three may be required.

 

For now, the velocity of money has remained in collapse so all that new paper being printing up is not yet out chasing goods and services.  When it does sneak out, we look for the kind of inflation such as has never been seen before.

 

It’s just a matter of preserving your lone coin or two and waiting…hardly exciting, but it is what it is.

 

More After This…

 

 

 

ODA: Observations, Departments, and Analysis


 

Quakes Are Back

After leaving our monthly earthquake reports looking lame of late, earthquake have come roaring back this weekend with lots of activity including:

Given that the Sun’s output is undershooting estimates for where it should be for the point in Solar Cycle 25, could the earth’s crust not staying warm/expanded have anything to do with these?  I’m sure the journals will get to this…just given them a year or two.

 

Graphic Evidence

A reader (Anthony) spotted a fine article which I neglected to mention last week called “The Punctuated collapse of the Roman Empire” over here.

 

“I thought I would send this along, just for the hell of it.  Cassandra’s legacy is the name of the blog.  Don’t understand why the study of collapses is not a discipline by this time – with its own math, catastrophe theory? Fame awaits – Ure’s Precipice?”

 

Well, that sure seems an attractive thing, although I’m more interested in a living wage and a few minutes to enjoy it.  Still, I made a note for Peoplenomics readers Wednesday to look at how a shorter-term matchup of the 2007 peak with the 1929 peak would fit, especially given that we have just had new all-time highs in the market.

 

Except, well, of course they weren’t all-time highs on an inflation-adjusted basis (with a string of footnotes half a mile long…) since “the Dow” would have bought you a lot more food in 2000 than it would have a couple of weeks back.  Ditto booze, too (the Pickled Price Parity Postulate).

 

There are a lot of headlines that support the notion of a latter-day Roman fall either in progress, or being down step-wise:

Coping: Marvel’s Franchise/DLT?

Lots of buzz coming out of San Diego where Comic-Con has been going on and with it, word of a new super-hero (Avengers: Age of Ultron) flick to start shooting in February. 

 

I have a terrible confession to make:  I love those comic book movies:  Super Man, Green Hornet, Spiderman…Yessir, that’s one thing America is really, really good at:  Escapist pap.

 

All of which got me to thinking back on my youth because I figure things are pretty much the same for young people today as they were back in the day.

 

When I was a kid (1950’s) comic books were going for a dime…this was in ’55 to ’57, or so.  By the time I finished high school (’67) the price of a comic was up to a quarter.

 

Just for the hell of it, I decided to see what a 1967 comic book should be going for in 2013 dollars.  Turns out the answer adjusted for inflation is $1.75.

 

To be sure, the cost of printing has been backed out, and the price of video distribution clicked back in, but Yessir, this explains how my kids were watching comic book-like flicks for a buck each when the video store down the street was having “Dollar Tuesdays” in the 1980’s.

 

Marvel was acquired in 2009 by Disney for $4.24 billion, but seems to me that when you step back and look at the category broadly that assuming we don’t blow ourselves up in the meantime, Disney’s approach (buying a franchise like Marvel) will continue to play well at the cash register.

 

So, while there are reports that  Disney’s The Lone Ranger” will lose $200-$300 million, seems to me that over time, the mouse is still alive and one of the few things I could put in a portfolio without dirty hands.

 

Besides, new upcoming stars like Zac Efron are generating plenty of ink.

 

Now, if they would just get on with building a theme part on all that land they have acquired here in Texas…

 

There’s been a lot of speculation around the web over the past few years that a 10,000 acre Disney property in Texas would make sense…and a poll over at WDWMagic suggests that the leading site would be near Austin.  There’s good transportation there, nice airport, land is not as pricey as up in Dallas, and the weather less “iffy” than down on the Gulf around Houston.

 

I’m going out on a limb here, but Disney announcing a new park would make sense over the next year, or so for a number of strategic reasons:

  • The interest rates for big projects may never get much lower than it is now. 

  • The price of land has been stagnant in many parts of Texas (down at 2003 prices nationally) so that’s one major cost to consider.

  • Politically, it would be a slam dunk since fair-haired Rick is already running for the White House, you can bet his administration would been over backwards to help Disney – plus it would be a capper for him politically in his “What I have done for Texas” PowerPoint’s.

  • The Texas economy is already leading much of the rest of the country so investment risk would be lower.

  • And…in terms of local/regional visitors, the combined population of Dallas and Houston, both within driving distance from Austin, is somewhere over 6.5 million in the Dallas Metroplex and another 6.2 million in Houston….there’s almost 13-million.

  • Now toss in Austin/Round Rock (1.8 million) and San Antonio (2.2 mil) and you come up with…

  • 16.2 million potential visitors, which means the population density is almost as good as for the original Disney Land.

Mind you, I’m not saying they will make any announcement, but intuitively it seems to me that if anyone really wanted to prove the recession was over and that good times were just ahead, an announcement by Disney of a new US park anywhere would be about as good an indicator as you could find.

 

Sometimes, a short-term hiccup in planned cash flows can be overcome with a bold new vision.  I don’t think anyone would question that and I think it Walt were still alive, he’d be putting down bets about here.

 

Thanks to the liberalized use of “eminent domain” putting the land together shouldn’t be that difficult….but whether Disney is run by visionaries or accountants is what’s on the table.  If interest rates begin to climb (and go up more than half a percent, or so without Disney announcing a vision) I guess we’ll have a hint which faction won.

Less than amusement:  7 people were injured this weekend at the Cedar Point amusement park in Ohio when the log flume ride malfunctioned.

 

And a woman was killed after falling out of the roller-coaster at Six Flags Texas Friday night.

 

Power of the Purse?

Don’t have second-source on this, but here’s some interesting blowback reported by Reader Rick from up in the Dallas area:

 

“Waiters are getting Trayvoned. At restaurants some black people come in, eat, leave no tip with note “No justice, no tip.” Happened to my son THURSDAY night at a 5 star restaurant in Dallas. “

 

Of course there are also lots of white people who also don’t tip based on race but it strikes me as one of those “anyone who stiffs the help is wrong” kinda things.  Bad manners on either side.

 

Coming for Your DNA

Reader Michael, who worries about such things, says buried in the latest Obama HIV initiative is a plan to get DNA samples of everyone in the country.  Or, at least those under 65.

 

Which is interesting, since people over 65 might actual remember the Constitution and the promise years ago that your “Social Security Number wouldn’t never be used as a form of National Identification.”  Yeah, uh-huh, you bet.

 

Lab Notes

One other lab leftover:  Did you see the UK Mail’s report on the biggest virus ever found on earth has been spotted?  And yes….it may have come from (you’re gonna love this…) Mars!

 

OK, that might explain men…we’ll be looking for the Venusian equivalent next…

 

Sure seems like it would fit with the Velikovsky spin-off notion of Venus arriving, ripping up Mars and planting Earth, though…

 

Write when you get rich…

George Ure (george at ure dot net)

******************************************************************

Here are some useful ways to spend your money…

******************************************************************

Now on the

www.peoplenomics.com website ($40/year premium content)

A Course in Surveillance Algorithms

An algorithm is simply a set of instructions for a computer system to follow in a particular order.  In the case of Big Data, the steps are capture, organize, integrate, analyze, and act.  Using this approach, we can build a fine example of the many trip-wires an innocent civilian could stumble over in the modern surveillance society.  Plus we have our monthly check of west coast port data with is oftentimes a decent truth detector about the economy and an update on many headlines and our trading model.  You may need a third cup for this morning’s report…

 

 

More for Subscribers      To Subscribe, CLICK HERE

         Need Logon Assistance? Click here

P.S.  Don’t forget: Peoplenomics subscribers are what keep the lights on at UrbanSurvival….since subscriptions there offset the expenses of this site.

 

George Ure’s latest writings…

 

         

 

Amazon has free Kindle reader aps for Win 7, Win 8, Mac, Android, iPad, and many others if you don’t have a Kindle.  There!  You have no excuse to keep from reading my stuff…

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