Breaking: Employment Costs
Just out from Labor:
“Compensation costs for civilian workers increased 1.1 percent, seasonally adjusted, for the 3-month period ending in September 2023, the U.S. Bureau of Labor Statistics reported today. Wages and salaries increased 1.2 percent and benefit costs increased 0.9 percent from June 2023.
Compensation costs for civilian workers increased 4.3 percent for the 12-month period ending in September 2023 and increased 5.0 percent in September 2022. Wages and salaries increased 4.6 percent for the 12-month period ending in September 2023 and increased 5.1 percent for the 12-month period ending in September 2022. Benefit costs increased 4.1 percent over the year and increased 4.9 percent for the 12-month period ending in September 2022.
A little hot, if you ask us. Not the kind of thing to get the Fed to lower, darn sure. Did sober the future’s prices, but that’s all crazy, right?
Dabbling the Toes
We cautiously re-entered a short position Monday. But, even missing the worst of the Bull raid, we were still down a couple of Benjamins by the close. With only to day to make up for it for our monthly check.
We have a two-part report today. This (pseudo) normal report and then the Housing Report version – basically a few comments on the S&P – Case-Shiller data – while we look forward to Fed Day tomorrow.
Speaking of which, the Bank of Japan’s decision is in. It’s a doozy, too. Bank of Japan Backs Away From Rate Cap Amid Persistent Inflation – WSJ. Essentially, they left rates unchanged, but their desk policy is less guided…I think that’s a fair way of putting it.
Or, as the “grayed lady” headlined: Bank of Japan Takes Another Step Away From Easy Money – The New York Times.
This is semi-consistent with our view on two fronts. First, we anticipate that even with high mortgage interest rates, the home prices paid are likely to continue higher in the report coming in an hour (or so). This is because when you have a rapid onset of inflation, consumers get antsy and buy, buy, buy. Before rates (and thus prices) go even higher. With $33-trillion of debt and headed far higher, the Bozo Class of policy makers are (pardon the loose language) tripping over their own dicks.
The second (bigger of the Big) is that the BoJ “floating the desk” idea does punch holes under the waterline of the Yen Carry Trade.
The way this has “normally worked” was simple enough: You borrow money for one percent in Japan (illustrative rates are used here). Then you (or Greedrock, or any of them Big Money, Big Money outfits) scurry into the U.S. stock market where (thanks to government inflation) that cheap yen-dough might rise at 2 percent. Pocket the spread.
The amount of the Greedrock Bonus Pool is then based on NYSE raising the yen-dough faster than the BoJ Loose Desk can tweak ’em out of positions. Since Central Bank trading desks are one of the few outposts of modern life which hasn’t switched genders, races, missions, or agendas, this is big. Now, looks like they’re going to be weaponized.
Like everything else.
The Eisenhower and Bank Suck
We’re going to change gears now. From a banking system that sucks to banks that suck. Specifically, river and channel banks.
Yes, kiddies! Time for another one of Ure’s “sea stories.”
First encountered in the PNW while pushing his 40-foot liveaboard sailboat along the channel that links the backside of Whidbey Island with the oil refinery district of Anacortes, Washington. East of NAS Whidbey.
Inspecting a chart of the Swinomish Channel here, you will notice that it’s a great short-cut (and a coward’s way) to avoid fast current sleighrides through Deception Pass I mentioned the other day when tidal currents are rolling through. If you’re going north of Anacortes (like up toward Vancouver, B.C.) it’s more direct than Deception Pass and faster in displacement boats. (A planing hull is restricted by channel speeds on the route, though.)
“Does this have something to do with the Eisenhower’s transit of the Suez, or something? Get to the damn point, Ure!”
Chill. The missing knowledge point has to do with “bank effect” also called “bank suction” or “channel suction.” It Wiki’s as:
“The asymmetric flow around a ship induced by the vicinity of banks causes pressure differences (Bernoulli’s principle) between port and starboard sides. As a result, a lateral force will act on the ship, mostly directed towards the closest bank, as well as a yawing moment pushing her bow towards the center of the waterway. The squat effect increases due to the decreased blockage.”
I know. You’re thinking “So if the Ike needed to go balls out in the Suez due to rockets, or whatever, if the helm team wasn’t ready for it, the I could be stuck in mud banks and plug the Suez?”
Yessir. That’s the kind of stuff that gets me out of bed at 3 am to look up baseline data. See the Eisenhower is bigger than your average Bayliner.
Most people don’t appreciate how deep the water under the Ike has to be. Minimally? It’s bottom of the bottom is 37-feet down. And loaded for bear? (Which we imagine they’d be nearing Paradise…) Could be 41-feet of draft.
The good news? How deep is the Suez Canal? Fortunately for us, the SCA (Suez Canal Authority) has a really useful graphic which we have borrowed to illustrate our concern. As you can see, an old, old, old reporter (who did grade school decades prior to 1980) would have been correct about bank suction and the odds of the Ike getting stuck.
It wasn’t hogged out to Eisenhower slow speed transit depth until 1980.
The canal now is deep enough that at moderate speed, everything should be fine. BUT – this is a nit – the deep part of the Canal is only 121 meters wide. The length of the Eisenhower is 1,093 – feet. In meters 333.2 meters.
In other words, it cannot turn around once committed to transit. (Reporting on this kind of detail is wholly missing in today’s world – yet it’s the odd fact here and there that lays the foundation of the future, sometimes.)
As our newest contribution to “Worries about WW3” for the day, might we posit a couple of small teams of “baddies” taking over a westbound ship, while another takes over an eastbound and the Eisenhower is run into a bank of the canal? Canal Rage. I can almost see the headline.
Or, alternatively, precision rockets begin to rain down on it and it tries to evade, yet as it does so, bank suction takes effect due to the helm’s lack of canal speed runs, and the ship is drawn into the sandy muck.
Where a couple of hijacked ships could mash into it before the perps make their way off into the desert.
Ure is Wrong, Again
My consigliere assures me I’m incorrect. He is more worried about what happens when the Eisenhower is clear of the Suez when it has to transit Bab el-Mandeb Strait. Which is a narrow area, about 20- miles wide. Other end out the Canal. Ways down.
Two routes through it. The northern (Perim Island) route is a couple of miles wide. The southern offers more maneuvering room in case of missiles. “But it’s an easy shot from Yemen – 50-mile range drones could ruin the flight deck with some lucky shots.”
Sadly, in military planning (in real wars) there are usually three plans in place by an enemy. So, we figure a belligerent (like Iran) might have three attack options which they might plausibly deny.
- Box and smash the Eisenhower with hijacked freighters in the Suez Canal. Bonus points to the perps because 50-ships a day of petroleum tankers and cargo stops dead until the Eisenhower is moved.
- The “Perim Island Turkey Shoot” where Iran would likely attack via cells in Yemen armed with drones and targeting the catapults on the Eisenhower.
- Last, but not least, an Iranian submarine which could fulfill the “crocodile has hidden on the land” article that G.A. Stewart posted on his The Age of Desolation website here. Stu is the vastly underappreciated “best of class” on what Nostradamus lays out in this period. Let’s pencil this out: What could be the “crocodile hidden on the land?”
Oh, yes, it can be done. See Were torpedoes ever considered for shore or harbor defense from land based launchers? – Quora.
Ever see a film of croc’s and alligators? What in the naval inventory comes to mind? Well, just consider this: They are very low profile and swim just beneath the surface of the water. Like a…what?
Bingo Gringo! Opposite the Perim Island which is on the north side of the Bab el-Mandeb Strait, we see a collection of islands called the Seven Brothers. Although there are really only six of these that are islands, per se. Let’s go Wiki, shall we?
- West Island, or Red Island (H?amra), 62 m high
- Double Island (Oun?a Dâbali), 46 m high
- Low Island (Tolka), 17 m high
- Big Island (Ka??a Dâbali), 114 m high
- East Island (H?orod le ‘Ale), 83 m high
- South Island (‘Oun?a Kômaytou), 47 m high
How could Iran sink or disable the Eisenhower?
Follow the Nostradamus script. Iran makes a number of different torpedoes:
- Hoot – A supercavitation torpedo. Possible copy of the Russian VA-111 Shkval.
The “plan of attack” might involve a handful of drones attacking from the north (Yemen) which might “convince” the Eisenhower command to track a more southerly route down towards the Seven Brothers.
From here, the “crocodiles” on land might be launched, since the launch of a “swum in torpedo” by a “small boat team” is not something too difficult to imagine, is it? Particularly when Iran could use anything from a fishing boat to one of their subs to get the “fish” into position with a small guard until the Ike is in close enough proximity to “Fire 1!”
No doubt, there could be a high-speed boat in the islands under camo netting, but you know the U.S. will be going over that area (even now) looking for signs of staging for an attack.
Our take on it is that either an “in the ditch” blockage, or an attack on the Eisenhower between Perim and Seven Brothers with Stu’s croc’s is a scary thing to consider.
A personal note as to how my mind gets into this line of thinking: I’m sensitive to how hard it is to “unstick a ship” once it hits the hard. Since when living in the Cayman Islands (1984) I had daily drinks on our top-floor condo deck with the cruise ship Rhapsody as my view. It had run aground a few hundred feet out from shore. (Three giant tugs failed to dislodge the cruise ship… – UPI Archives) Big boats and beaches don’t mix.
Wars and conflict are unpredictable. And did you see his piece on how Egypt is warming up for a fight over Gaza? Gads.
This is a ‘lunch money trading day’ when a whole lot of things could go very wrong over the balance of the week.
Running of the Bears
Early market futures turned up, ahead of the Housing data report. But we’re clinging to a short position in here based on similarities (in wave forms) between our meta indices and how 1929 rolled out:
The pop-up Monday is the rise at the end of the upper trace. We could extend on that today. But we’re thinking to stay short even if the trade is upside down, for now. because if the waveform continues, November could be “interesting” too.
I’m not the only one thinking this way. Some of the cub reporters are seeing it, as well: The 2023 “bull market” now looks like a bear rally (axios.com).
Where were all these newbie reporters when we were calling the (likely) top of Wave 2 and we’re only in the final stages of 3 (1) (v) ((iv)) now?
What news will make what future for us? Let’s see, shall we?
The Biblical flavor of modern wars continues to be a bit too much. Netanyahu’s Holy war: Israeli PM quotes the Bible and says ‘this is a time for war’ as he vows to ‘resign Hamas to the dustbin of history’. Which sounds to us awfully close to genocide if taken literally. And didn’t anyone study WW2?
Pain in Ukraine in the main: Which forces NATO pivoting as Final rupture: Israel puts Russia and Turkey on the “Axis of Evil” – Erdogan: “Israelis are criminals and terrorists – They will pay a heavy price”. Which turns Erdogan into a (pick a word for semi-belligerent)____?
Could Hamas be a test case for China’s PLA planners?Former Hamas head says China eyeing similar attack on Taiwan | Taiwan News .
If you find all this War Talk taxing, put this in your pipe and see if it lights: House GOP bill aids Israel with IRS funds for rich tax cheats | The Week. To which, the house plant team shoots back White House accuses House Republicans of ‘playing political games’ with Ukraine aid to help the wealthy ‘cheat on their taxes’ | Washington Examiner.
Around the Ranch: Pepper Parent
Some months back, reader Hank out on the Big Island (big if you don’t compare it to Texas, ahem) sent me some Hawaiian pepper seeds. As of yesterday afternoon, it looked like pepper parenthood was at last approaching:
Small white flower in the middle, got it?
Also in the greenhouse, the banana peel powder was sprinkled on and watered in and the new tomatoes are trying to set fruit. the diesel heater kept the temp around 55 overnight, and with East Texas due for a warming trend going into the weekend, we may just get more Swiss chard, bok choi, peppers, and some ‘maters out of the room before Christmas, we’ll see.
Reminder: Spring Ahead is this coming weekend. Stupid Daylight Time reverts to reasonableness. Rest of the world likely won’t, however.
Write when you get rich, and back with housing about 8:15 AM central.