Slap the "Finance" Writers

If you plug in $850 to the Minneapolis Fed inflation calculator, and the year 1980 and simply adjust for inflation to 2007, you'll see that in order for gold to make a new high today, it would need to exceed $2,128.09 per ounce.  Of course, there was a lot less actual demand for gold back then, and a lot less industrial and now growing medical demand for silver, too.

But, it has to be noted that gold did just fine on Friday, closing up between 14 and 16+, depending on whether you're looking at spot, futures, who's quote and so on.  Still, I do look back fondly to the archived copies of this news analysis site with pride on my summer 2005 silver decision, which I was mentioning prominently in Oct '05:

In keeping with this, we expect the market to rally today as hurricane related unemployment numbers come out. Someone has to figure a happy spin to it. Our spin? Well, silver which we bought under $7 is doing fine and gold which we bought at $265 is pressing toward $475. Our position in precious metals and cash has allowed us to sleep at night. (Usual disclaimers, I don't offer financial advice, etc. apply. Pay for professional advice. We're just a source of ideas for you to act on as you will...)"

Nevertheless,  that's an investment that has worked out just dandy.  I waded back into mid 2008 grain yesterday on the commodity side - and more on that tomorrow for Peoplenomics subscribers.

Again, this kind of development poses a real opportunity for a thinking person to spy which media are aware of the pernicious long-term impacts of inflation, which are corpgov and might be burying it - as if to pretend that the corpgov "strong dollar policy" is anything other than a lie, and my pal JB at www.fortwealth.com pointed out to a Dow Jones reporter on Friday.  "If this is a strong dollar policy, what the heck would a weak dollar policy look like?"  Touché.  Wonder if that made it past the editors?

So here's your homework Go to the Google News Search Engine and look up gold.  Here, I will do it for you.  Now, click on any of the stories about gold hitting new highs.  Then, using your browsers word search function, look for the word inflation in each story. 

It's my view that if a report deals with gold prices from 1980 (the last time it was over $800) and doesn't mention the inconvenient truth about inflation and the fraud of a 'strong dollar policy' then the reporter is either in league with the Powers That Be, or should go back to writing obits until they can at least report reasonable context.

Bored
The report that Citi's board of directors would be holding an emergency meeting this weekend helped pull the Dow to a great big 27 point bounce after a butt-whipping of more than 360 points down the day before, was less than encouraging.

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What I've been hearing and reading is that the situation for many of the financials is worse ...much, much, much, worse than is being reported, and that additional write-downs are on the horizon like a bad case of the flu making the rounds.  While we are a week or two from a news event about 'winds'  the real story about financial panic is not due till late in the month.  It's then that you'll want to be out of harms way - December and January seem like fine times to take a vacation from the paper chase, as I read the predictive linguistics.

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Depending on the spin that's put on whatever Citi comes up with over the weekend, it will likely give a good clue as to the market's early direction next week.

Claim: US First Use of Nukes

There are reports in the Middle East that it wasn't just Israeli jets that attacked a reported Syrian nuke site on September 6:  The claim is that it was US jets with a couple of tactical nuclear weapons that were used.

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How do you suppose those arms could have been used?  Do you recall it was about a week before the strike that a B-52 overflew the USA with what was reported first as five, then six, air launch cruise missiles?  And more than 70 have been disciplined in the case now.  So it does leave me wondering, hmmm...

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True, or not, the report will no doubt be used to a) further polarize Middle Eastern people (against the USA and Western interests) and then on top of it, we'll see no mention of this in CONgress because if it's not true, even holding hearings would lend credence to the claim, and if it were, CONgress would want plausible deniability.  "Oh, those folks in the WH did what?"

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Odd how the Universe works with times and rhymes: About the time that story was breaking in the ME, America was learning of the passing of Paul Tibbets, the man who flew the first A-bomb to Japan.

Deal Time

Ford and the UAW have a tentative agreement. 

Homegrown Terror

The Palo Verde nuke plant is on lockdown following the discovery of a worker with a pipe bomb.

Around Here

A little shorter report than usual today (it being Saturday and one of two days during the week that I allow myself the luxury of sleeping in till 6 AM...

The decline from the peak chart, which will be posted for Peoplenomics subscribers tomorrow is looking very interesting.

Compliment

I know now why I bought a Gateway computer, this time around (They've been acquired by Acer, as I understand it).  They have USA based support.  So, I think we may have nailed down the reason for my second monitor blinking out - and I'll be testing it over the weekend.

But for now, I almost had to pinch myself: a company with USA support and a system engineer named Chase up in South Dakota, who is sharp, and is even running a near-duplicate of my system to see if he can recreate the fault mode.  All I can say is "Wow!"

Friday November 2, 2007

Not Saying "Told You So" But...

Like I said a couple of weeks ago, I was willing to suspend belief and be a bull until when?

" As I explained before, I am a steadfast Bull until the first of November. From there, I expect to be changing my tune 180 degrees. "

You didn't happen to notice the date yesterday, did you?  Or the closing Dow?  And apparently a lot more "Credit Crunch" to come, say reports.

Jobs and Cuts

First the jobs report from the Department of Labor which was predictably higher than expected:

Nonfarm payroll employment rose by 166,000 in October, and the unemployment rate was unchanged at 4.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job gains occurred in professional and business services, health care, and leisure and hospitality. Manufacturing employment continued to decline, and construction employment was little changed.

Unemployment (Household Survey Data)

The number of unemployed persons, at 7.2 million, was essentially unchanged in October, and the unemployment rate held at 4.7 percent. A year earlier, the number of unemployed persons was 6.7 million, and the jobless rate was 4.4 percent.

In October, unemployment rates for the major worker groups--adult men (4.3 percent), adult women (4.1 percent), teenagers (15.6 percent), whites (4.2 percent), blacks (8.5 percent), and Hispanics (5.6 percent)--showed little or no change. The unemployment rate for Asians was 3.7 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

Total Employment and the Labor Force (Household Survey Data)

Total employment, at 146.0 million, was about unchanged in October. The employment-population ratio--62.7 percent--was little changed in October but was down from its recent peak of 63.4 percent in December. The civilian labor force, at 153.3 million in October, and the labor force participation rate, at 65.9 percent, were essentially unchanged from September.

Now, just how much of it was created by the CES Birth-Death Model, which statistically  supposes jobs created?  Try 103,000 for October.  A true skeptic would say 166 thousand new jobs, backing out 103 thousand CES Birth/Death Model estimated, leaves a real gain of 63-thousand, but any port in a storm, right?  And the 'engineers flipping burgers' report, Table A-12, category U-6 stayed steady at 8.4%.  Predictably.

And while the government is telling us on the one hand how good things are, I can help but notice that Chrysler is slicing one job in three, with another 12,000 about to get axed.  I'm not expecting this to show up as a noticeable blip on the Mass Layoffs report, though.  Statistical series which have been historically noisy have all quieted down.  All coincidental, I'm sure.

"Temporary Open Market Operations"?

Oh boy, did the linear thinkers grab me on this one:  I posted yesterday how the Fed was injecting some $41 billion into the financial system in open market operations on Thursday.  And the (quite correct, by the way) clinicians of money sent emails like this one:

"George,

You need to match repos accepted versus repos maturing to get the actual picture.

Accepted:

$12 billion in 1 days $21 billion in 7 days $8 billion in 14 days

Total $41 billion accepted

Maturing/Expiring:

$5.5 billion in 1 days $12 billion in 2 days $19 billion in 7 days $6 billion in 14 days

Total $41.5 billion maturing.

That is a net drain of $0.5 billion. Essentially flat. Basically the Fed and primary broker dealers keep the balls in the air."

OK, that's absolutely true, but you're not getting my main point.  It's better made by Mover Mike who is also asking the same kind of question I'm trying to get to:  "Are some TOMO's Now POMO's?"  In other words, have we past the point where temporary open market operations are a thing of the past and because of the fragility of things, they are on the way to becoming permanent open market operations (POMO's)? 

That's the point.  If the answer to that is "Well, maybe..." then we essentially have the banksters bailing banksters rather than letting the free market (which you'll vaguely recall was once a republicorp mantra, but I don't hear so much about it now that the financial sector is getting its ass spanked for predatory lending and paper hyping) deal out justice of a financial type.

In the name of "financial stability" corpgov has eliminated risk!  "Bust the bank?  Oh, no you don't.  Here, take this bailout money and don't rock the boat..."  Screw the someday retiring Boomers, who were thinking their hard saved Dollars would hold their value.  We're not in that business, are we?  Dollar under 0.69?  Too bad.  We're going to have economic stability if it kills us.  Which, I'd wryly note, it's well on its way to doing.

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Nothing would surprise me less than a little more TOMO/POMO action today and a bounce-back rally into the weekend.  But as I am jotting things down this morning, the rest of the world seems little-fooled and the dollar is buying about 0.69 Euro, and gold is still over $792 on the spot market and oil...well, let's just say my gas price predictions of higher prices next weekend compared to this are looking like a fair gamble nationally.

Predictive Linguistics Hit: Diaspora Continues

Flood, Drought, Walking Shoes

Hmmm...let me think:  What is the relative importance of flooding, drought, and people moving all over the place (Diaspora), compared to printing ink on paper and making a life of that? Not to mention building a whole currency around it and expecting the rest of the world not to wise up.

It seems to me (not to mention the time monks, Cliff and Igor, who run the time machine/predictive linguistics operation) that getting a chance to see a little ways into the future (for entertainment value only, of course) may outweigh the quest for paper.  After all, you can't eat paper, and can't drink it, so at some macro level, fundamental analysis is bound to over-power the noise-trading schemes of the quants and the corpgov play along crowd.

As an illustration of how Terra Intrudes and Ma Nature spanks, let's consider the case of  Orme Tennessee where the water has now run out due to the Southeast Drought, which seems likely, as we get into the undeniable part of the Greater Depression/Second Great Depression, destined to play out as the modern analog of the Dust Bowl of the 1930's.  Except, for lack of water, we will likely see not only farms abandoned, but things like manufacturing, homes, and so forth. 

I've been watching the weather forecasts for Atlanta, and I'm still not seeing any rain in the forecast through next week.

Here's actionable point #1 for today's report:  If you have relatives in the Desert Southeast, have you got plans to put them up at your place?  Find them a job?  Build a spare bedroom for them?  Figured out some way to store their personal goods that they'll lug along when they move in with you?

The Diaspora which linguistically for months has been seen as coming to a planet near you (*look at your feet for hints which planet we be speaking of located) seems likely to impact huge numbers of people.  How big is huge?  How many people are in the Desert Southeast, and now multiply that times 3 and you might get a handle on it.

I'm bringing this up