If This Ain’t a Depression…

Complexity is a grand and glorious thing:  It enables people to hide the truth right in front of themselves and even go so far as to deny its reality. Against that backdrop, please consider:

  • If you had purchased an item in 1999 that cost $100 (back then) the same thing today would (using Fed figures) cost $140.17.

  • Some things cost more, housing is less:  The uneven serial sectoral; inflations mask the underlying dynamics of the Second Depression.

  • Similarly, more than 6,000 bank  branches have been closed since the IndyMac failure. How soon we forget!

  • However, again, this is “masking” in that a few branches were acquired by other banks and some portion of the shuttered branch business had already migrated to the Internet.  It won’t be back.

  • The Dow Jones Industrials are touted as hitting “all time highs” by the me-too financial press.  Yet this figure is mentioned in the absence of an honest long-term inflation context.

  • The Dow so far this year has hit 15,589.4 yet when one uses the Minneapolis Fed inflation calculator, we see that the January 14, 2000 high of 11,722.98 should be 15,897.07.

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Coping: Reading at the Exit

Let’s start with a reader’s write from Tom in Illinois:


“….Your digital madness novel is a great idea, do it if you have the time. However, may have a mildly rhyming plotline, in an old sci fi book, written back in -58 by a guy named Miller, can’t remember the first name. Anyway, without revealing ANY of the plot line, may I recommend “ A Canticle for Liebowitz”, superbly written, and touches on many of the idiocies of mankind, including the absurdity of religion, the insanity of nuclear weaponry, and the propensity of man to keep sticking his weenie in the meat grinder. If you can find it, and have not read it yet, I guarantee you will love it. “


I actually (in a vague sense) remember reading it!  Perhaps the plotline was somehow embedded, since when I wasn’t memorizing everything I could get my hands on about electronics as a kid, I was sucking up everything I could in the way of science fiction.


The two reasons it jogs something? The name Liebowitz and it was the first time I had run into the world “canticle.”  A Canticle for Leibowitz is still available in paperback from Amazon, by the way.

Speaking of writings and readings:  I keep thinking that if I ever get to the point of retiring, it would sure be fun to go back and reread a lot of the books I read as a kid.  A kind of reboot of data files before the Big Sleep.


I remember long ago when I interviewed Louis L’Amour and he told me about how he’d worked as a merchant seaman, reading pocket collections of great literature to other merchant mariners in the focsle at night.


Well, that got me to looking into such mini pocketbooks and you can still find the Everyman’s Library on Amazon with a fairly wide assortment of readings.  One, for example is The Stories of Ray Bradbury (Everyman’s Library (Cloth)) while another is Three Novels: Journey to the Center of the Earth, Twenty Thousand Leagues Under the Sea, Round the World in Eighty Days (Everyman’s Library (Cloth)).


Mind you, there’s a great many of the older classic books available on Project Gutenberg website; simple enough to download classics and then .PDF them and forward them to a Kindle, or toss them onto a ‘droid and read ’em as text files there.


As a Man Thinks

Most people don’t realize the extent to which their thinking is “bounded” by their inputs.  In other words, the number of new thoughts and ideas you’ll have is directly related to how much raw material you pack into your brain.


Creativity, seems, may be something of a matrix; which is one of my favorite topics to discuss.  Thus, the more fresh raw material you put in to your head, the more new ideas come out.  Which is why I try to devote an hour or two every day to reading something.


Readers have generously sent me a wide selection of readings, which I take up as time allow:  I’m presently parsing in “Astro-Economics: A study of astrology and the Business Cycle” by LCDR David Williams, which fits in many ways with one I’ve been working through from my personal stack (which you can get from Amazon): The Unified Cycle Theory: How Cycles Dominate the Structure of the Universe and Influence Life on Earth


That book by Peutz ain’t cheap, by the way:  A shade under $50-bucks.  But the rare booklet by Williams (1958) can still be found occasionally for $20-something from Amazon’s bevvy of used book sellers.

One footnote about those mini pocket books:  The fonts are small, so they’d be something to read before your eyes get too old.

Which get’s me to a very interesting thought about reading.  Seems to me there are two ways a person could look at the topic and structure your life which distills down to two paths:


1.  One path would be to “read like hell” until age 30 or so (whenever an advanced degree of some kind is nailed) and then quit reading everything except readings in your field of expertise for the rest of your life.


This is easy on the eyes, inexpensive, and minimizes time consumption for inputs.  Toss in the fact that 90% of news is useless in terms of personal action (what are you going to do in your life about last night’s latest Trayvon demonstration, for example?) and you can save all kinds of time to devote to either staying absolutely current in your area of expertise.


2.  The OTHER path would be to progress as above, until you have enough knowledge about  something to make a good wage, but then portion off some part of each day to your continued general education beyond what’s in your specialty. 


To this kind of approach, last night’s latest demonstrations (Zimmerman) do mean something, and reflecting upon news of such events might lead to insights which, although not specifically useful in a specialty/income area (outside of HR, perhaps) do reveal the current state of affairs in the “hearts of men.”


Eventually, one comes to the ponder about whether there’s some kind of existence of a human “essence” after Life as we know it ends.  Since most professional specialties only work in the physical here & now, if there is some kind of after-life, then going there, which is presumably another dimension or way of existing as spirit/essence/whatever, with specialized knowledge about how things “used to work on that plane” would be pointless.


What seems more likely to transcend the boundary of death would be the “affairs in the hearts of men” and in this regard, the more general information about the operating habits of other spirit/essences/whatevers would become the entire point.


Arguably, no one knows what happens beyond the grave, but there’s been enough information coming back, as documented originally in Dr. Raymond Moody’s Life After Life: The Investigation of a Phenomenon–Survival of Bodily Death wherein a lot of heart attack victims and others who’ve been dead, but just for a while, come back with amazing tales to tell.


One of these days, my friend Capt. Midnight has promised to write up a very personal experience with this phenomena of “touching other side” which is quite amazing, revealing, and I think important.  I’ll pass it along when it arrives (which I anxiously await).


Whatever IT is, seems to me that the more one reads, and the more one works on the “inner work” the better equipped one will be for whatever is next. 


Is television a help of hindrance?  We simply don’t know yet.  However, my personal choice has been to be very careful about that which goes into brain (from where it seeps into heart) which is why I don’t watch much horror or any gratuitous violence on television.


Not that the Way of the Peaceful Warrior precludes right action, it’s just that present society places lots of emphasis – too much – on the what can you do for me right now kind of life.  While the large problem is what do we take through the exit safely stowed in heart and consciousness.


If, perchance, the after-life is a restitching of all that’s in your head and heart right now, what would you put into it next as important raw materials?


I’m always shocked how few people grasp the question.


But with the weekend here, come five minutes past Miller-time this afternoon, might I suggest one hour this weekend for a well-chosen book?  One that won’t come back and bite you in the soul down the road? GIGO.  And maybe for eternity.


Sci-Fi Note

One other “perchance to dream” note in favor of sci-fi?  Mars Rover discovers more evidence that Mars was once habitable.


War on Planned Obsolescence

Reader Shelly has been following our discussion as we seek appliances that can “outlive us” and relates this:


“Hi, George: When my dishwasher died the cause was the electronic control board, which was toasted.  It would have been a very expensive repair, almost $300 just for the part.  Shocked, I asked the salesman what a new dishwasher would cost and was told that I could get a low end model for about $500.  Plus shipping and installation.

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Job Seeker Secret: Why Bother?

As every morning, I begin on an economic note since our roots around here are sustainable living, long wave economics, and couple of nickels from from confiscation by government (inflation and taxes) and charlatans in finance (the Bernies et al) who seem to appear at every turn.


But this morning’s insight from my daughter Allison tells more about the condition of America that years of schooling and whole reams of economic data.  Best of all, it’s simple for anyone to comprehend.


Allison works, as I think I’ve mentioned, in the communications industry in sales in the Seattle area.  She works long hours, trains hard, has encyclopedic product knowledge, and (as is the standard in our family)  is honest as the day is long so consequently she’s doing very well.  Here lately, she’s been working a lot of overtime and I asked her about that.


Well, dad,” she began “We had an ad out here last week to hire some new sales reps.  We had a total of 75 resumes come in.   But then, when we called and basically invited all of these people to come in for interviews only six expressed any interest!  I was talking to a friend of mine in our HR department and she said if we’re lucky three will actually show up and then we will find one…maybe two…that are worth hiring.  And we could hire five….”


I trust you see the dynamic at work here?  It’s summertime.  People who are on unemployment in many states need only to demonstrate that they have applied to three or four places per week, not that they actually went somewhere when a potential job called back, did an interview, or actually followed up in a meaningful way.


Now, this is just a wild-ass guess on my part, but seems to me that if 75 people were invited in for interviews at least 25% ought to be interested enough to show up.  Historically, in really hard times, the number showing up would be more like 50% or more…


No, I’m not arguing that welfare, food stamps, and unemployment comp should change.  But just presenting the data from a trusted observer.


Attn. HR Folks: Research Requested

If you know anyone in an HR position, ask them what their current “call-to-interview rate”  and the “interview-to-offer” rate is running.  Then, if they keep good records, ask them what their ratio was, say, five years ago…or better: 10-years ago.


My bet is that we have seen a large decrease in the call-to-interview ratio as people have become much, much more selective about the kinds of work they are willing to do, and how much effort they will put in to getting a job.  They can get a subsistence easy enough, so why put forth real effort?


Meantime, California is likely to cut extended unemployment comp.  The dynamic there is that if California rolling three month unemployment dips under 9% then 10-weeks of benefits dry up.


One other note about unemployment:  Fresh figures are out from the Labor Department this morning:


“In the week ending July 13, the advance figure for seasonally adjusted initial claims was 334,000, a decrease of 24,000 from the previous week’s revised figure of 358,000. The 4-week moving average was 346,000, a decrease of 5,250 from the previous week’s revised average of 351,250….”


With this latest bit of data integrated and with options expiration today, we look for the market to have a reasonably steady day (barring left field events) with volatility to increase next week and a possible down-side bias.


Student Loan Deal:

Inflation Forecasting School

There’s some excellent leg-work on what’s ahead buried in the report from the DesMoines Register which reports on a new deal being cut which may resolve student loan rates at least for a while into the future.


How so?  How does one infer the direction and magnitude of coming interest rate increases, the return of inflation, and such? 


It’s a two-part process.  First you get a sense of where Big Ticket interest rates are presently.  For this, flip over to the Federal Reserve’s Consumer Credit (which is really debt from where you and I sit) and notice the present new car loan rates.  For new cars it is about 4.13%.


You might want to make up a basket of rates:  Refi’s of home loans are in the 3.5% rate presently (basis a 15-year loan) and the 10-year US bond yield is running about 2½ percent.


Now, flip over to the present student loan rates:  They used to run a modest 3.4% for direct subsidized loans which had a first disbursement date between July 1, 2011 and June 30th of this year.


Now, however, a new student loan is running 6.8% (ibid).


The synthesis of this morning’s Des Moines Register report and a little common sense gives us two interesting thoughts to mull over.


First, the DR reports that democorps won a lifetime of loan cap of 8.25% while the cap for grad students would be 9.5% and for parent loans (PLUS loans) would be capped at 10.5%.


Which means – reading between the lines – that econometric modeling by lenders and government off in the back rooms is looking at interest rates going up another roughly 2-3% from current levels in the immediate future.  At least for now.


But there’s one other observation that comes into view which causes me a bit of consternation:  The marketplace presently provides more of an incentive to buy a new car than to get additional education.


Which, near as I can figure, is not the way to build a competitive country.


A number of groups are calling out the Fools on the Hill on this, but they have a track record of being “hard of thinking” when it comes to sacred cash flow cows of campaign-buying banksters.  The global chieslor cartel gets to borrow money from the Fed cheap, mark-up as loans to students, take spreads…


The future, seems, still has to be a profit center for the banker-class.  EBM* at work, again.


Is there hope?  Maybe: as Jesse Eisinger (NYT Dealbook/ProPublica) notes: “Finally, Bank regulators have had enough.”  It’s a little early to be celebrating…years early.


*Everything’s a Business Model

That Signpost Up Ahead?

India’s outlook on the economy has turned down in the latest Business Today-C fore Business outlook.  Snip from their press release:


“The turmoil in the foreign exchange market undid the gains of the last three quarters and the confidence level of businesses has dipped for the first time in four quarters.

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Coping: A "Number Station" on YouTube?

I don’t know if you’re old enough to remember the early days of advertising, and this maybe goes back to the days when man was not yet fully immersed in online media, but in the early days of rock ‘n roll advertisers often used the “mystery promotion” which involved doing advertising related to a particular date or place.


“Stay tuned to the super – 610 because this weekend we’ll…” And there would be somebody interrupting preventing the message from being complete.  Those kinds of promotions on radio increased average quarter hours and TSLs; time spent listening.


It’s a classic advertising ploy and one that can often be used in order to develop buzz around an upcoming event, especially if the event is a brand-new one and has no track record to otherwise attract interest.


If I told you “Be at the corner of Main Street and Willard Avenue at 10 o’clock Saturday because I’ll be giving away money…” You might be in being there.


A more complete disclosure about what my intent was, on the other hand, might keep you away. “Be at the corner of Main Street and Willard Avenue at 10 AM Saturday because I’ll be giving away three cents.” You see how some of the excitement, some of the mystery went away?  Classic American hype.


So now what we’ll do, to kick off an otherwise boring Thursday summer workday, is we’re going to combine some good old-fashioned advertising hype with the shortwave radio mystery stations that broadcast nothing more than numbers.


What has come to our attention (courtesy of reader Ryan), is a most curious set of YouTube videos which begin with the phrase “how to pronounce…”


The first one I found was “How to pronounce 77.” all it says is that “something is going to happen and 77 days.” I have no doubt that it will, since the sun has a high statistical probability of coming up on that day.


In the exciting “how to pronounce 76” the assertion is made “I’ve been trying to tell you something for 11783 days. Something is going to happen in 76 days.


“I’m awake now, things are clearing up I’m not saying the words now. something is going to happen and 75 days.


“I’ve got a minute, let me tell you what I think is going on. Something is going to happen and 74 days.”


“Tensions between the districts has spiked in the last few months. Something is going to happen and 73 days.”


“You can see it in the markets. Everyone is ready for a storm. Something is going to happen and 72 days.


“They’re singing a new song in the streets of the zone. Something is going to happen and 71 days.”


“I have plenty of information to keep me company.

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There Goes (or should I say WENT) HAARP

Normally, I’d start up a report with something economic – like this morning’s consumer price report which we’ll get to in a second – but the first thing out of the hopper this morning is to note the report from the American Radio Relay League (the ham radio society I’ve told you about umpteen times) that the “HAARP Facility Shuts Down.


According to the ARRL report, the Gakona Alaska facility has been shut down since early May and while a new contractor may come along for some finishing up research this fall and winter, the diesel generators on site no longer meet Clean Air Act requirements….


All of which leads to an intriguing question:  What about all the reports on the net about supposed “HAARP signals” impacting the mainland of the USA which seem to still be out there being reported this morning?  I’m not hearing HAARP on my ham rig…


It leads to some uncomfortable conjecture about the alternative reality called the Internet.


I guess we’ll need to find some other means of constructing a portal for alien reptiles to enter this dimension.  Hey!  Wait!  Isn’t that was CERN is for?  And what about using HAARP for mind control programs?  Does that mean we’ve been running out of control for two months now?


Time to double up on the meds….


Consumer Prices

OK, they came out this morning and as one might expect the continue to show modest inflation at the retail/consumer level:


“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today.


Over the last 12 months, the all items index increased 1.8 percent before seasonal adjustment.


The gasoline index rose sharply in June and accounted for about two thirds of the seasonally adjusted all items change. Other energy indexes were mixed, with the electricity index rising, but the indexes for natural gas and fuel oil declining.


The food index increased in June as the index for food at home turned up after declining in May. The index for all items less food and energy increased 0.2 percent in June, the same increase as in May. Advances in the indexes for shelter, medical care, and apparel accounted for most of the rise, with increases in the indexes for new vehicles and household furnishings and operations also contributing.


The indexes for airline fares, used cars and trucks, and recreation all declined in June. The all items index increased 1.8 percent over the last 12 months, an increase from last month’s 1.4 percent figure.

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