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Published Monday through Friday about 8 AM Central Time Except Holidays

 

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Is America "On Final Approach" to Financial Collapse?

"Ladies and gentlemen:  Please return your financial seatbacks and tray tables to their upright and locked position as the Captain reports we have lost an engine and may experience a difficult landing.  In the interest of safety, please assume the survival position outlined in the safety card located on the web site in front of you..  Please make sure the aisles are clear and that all IRA's and retirement plans have been stowed in the investments front of you...."

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A number of readers have asked for a special update this weekend on the free www.UrbanSurvival.com  and mirror www.IndependenceJournal.com web sites because of the gravity of this week's economic conditions.  So, I've put writing this weekend's www.Peoplenomics.com report ("Are Depressions All Bad?") on hold for an hour or so while I run through some of the permutations for next week, remembering that October 7th at 7:10 UTC is the center on the scatter plots of our "hot date" which has been peeking out of the www.HalfPastHuman.com predictive linguistics for more than a year. 

 

This is the same bleeding-edge processing of internet language change that has enabled us to get things like the China Quake right within 2 days earlier this year, caught big events like 2001's 9/11 attacks more than 2-months in advance and captured the essence of other major 'news' events with extreme emotional content very much in advance including the regime change/revolutionary change in Pakistan on August 18th - arguably they were off only 36-hours on that one, having pegged the change at August 17th.  (*In deference to their reports, I referred to this as coming back in our Friday May 16th report well in advance of events...")

 

So we look forward to the balance of this weekend and as late as Thursday/Friday of next week with a heightened state of awareness/concern/trepidation (or 'fear lite') because of predictive elements that go to the idea of:

• A major event which could dramatically impact 2, 2.2, or 22-million Americans.

• This 'impact' could be the range of something fairly minor like "My bank card doesn't work anymore" to a 'blinding flash from a terror attack' on US soil.

• This latter is somewhat supported by references early in the data to 'attack on US interests" and the fact that al Qaida has a nasty habit of trying to influence outcomes of elections, such as was the case with the Spanish train bombings a few years back.

• The 'events' of next week will linguistically be characterized by about a 20% natural disaster/earth related component, a 40'ish percent impact that will be 'military' in nature and a 40% (or higher) impact that will be 'economic' in scope.

 

While we can't give much more than that (plus last week's Peoplenomics report which asked the question "How would you cope with going camping for the rest of your life?" the main thing we've advocated in personal financial structuring so that you become - to as great a degree as possible - downside resistant.

 

There are plenty of good reasons to have taken our advice to 'prepare for at least 6-months of chaos - and I mean besides the linguistic shifts that are a looming present concern.  There are US government web sites that advise people to have a couple of months of preparations and plans to cope with extreme disruptions from elements such as the Bird Flu (www.pandemicflu.gov) but they would work just fine for financial disruptions, too.  Thus, any reasonable preparation for a disruption of modern life seems less reactionary than prudent, sorry to say.

 

The way I look at it, having a bit of food, a couple of dollars of cash on hand, maybe some precious metals, and a mutual assistance plan for your neighborhood all prepped and in place is not paranoia, so much as a reasoned response to a growing threat list that is not only beyond personal control but also likely beyond government control except in reaction to it.

 

That the U.S. Army's NorthCom now has a (never before done) active unit inside the U.S. which is serving as a ready response unit should it be overlooked - someone in government sees a high risk period to civil order, too.  (High bandwidth video capsule). 

 

We have to salute Representative Brad Sherman for outing the potential for this coming Monday for martial law - and how the PowersThatBe we selling fear like crazy in the back rooms of the House of Representatives.  I won't even start to review the potential illegality of the Senate originating a spending Bill, because that'll just Executive Ordered away.  So much for the Constitution as the ultimate source of authority, eh?

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Because Cliff and Igor are continuing to work on processing of linguistic data even now, ,we've arranged to be guests on the Jeff Rense radio program on Monday night- from about 11 PM Monday Eastern to 1 AM (Tuesday) Eastern, or 8-10 PM Pacific to recap and get into anything new that comes our of this weekend's processing. 

 

For subscribers to the actual ALTA (Asymmetric Language Trend Analysis) reports, Part Four of the current predictive run should be posted later today with a preliminary 'event horizon' extending out to the 7-th lunar cycle of 2009 - about mid-summer, which by the way, continues to evolve as a "Summer from Hell" based on the changes in language which  appear over the next six months and depict a rapidly declining standard of living, rationing and further restrictions on travel, not to mention shortages galore, here in the U.S.

 

However, remember, this is only speculative and is based on a still-developing science which is off in a just-being-discovered area of science; an offshoot of radical linguistics.  There's nothing we'd like more than to be dead wrong.  But I'm not betting that way.

 

I don't expect us to be - but that is a possibility.  So if you prep and nothing happens, just enjoy having good stocks of goods on hand and use them as rotating inventory allowing you to shop bargains in the future and reduce the operating cost of your family/household.

 

Nevertheless, THE most important bit of news to have handy in the early going next week once we move into the 'event window' could be the NYSE/stock market circuit breaker levels.  You'll want to print these out and keep them by your computer for the balance of the year, I expect:

 

--- section to print ---

"NYSE Announces Fourth-Quarter 2008 Circuit-Breaker Levels

NEW YORK , September 30, 2008 -- The New York Stock Exchange will implement new circuit-breaker collar trigger levels for fourth-quarter 2008 effective Wednesday, October 1, 2008. Circuit-breaker points represent the thresholds at which trading is halted marketwide for single-day declines in the Dow Jones Industrial Average (DJIA). Circuit-breaker levels are set quarterly as 10, 20 and 30-percent of the DJIA average closing values of the previous month, rounded to the nearest 50 points.

In fourth-quarter 2008, the 10, 20 and 30-percent decline levels, respectively, in the DJIA will be as follows:

Level 1 Halt A 1,100-point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.

Level 2 Halt A 2,200-point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.

Level 3 Halt A 3,350-point drop will halt trading for the remainder of the day regardless of when the decline occurs.

Background: Circuit-breakers are calculated quarterly. The percentage levels were first implemented in April 1998 and are adjusted on the first trading day of each quarter. In 2008, those dates are Jan. 2, April 1, July 1 and Oct. 1.

--- end section to save and print ---

 

Thanks to my friend Robin Landry, an independent (and like thinking) broker in Shawnee, Oklahoma, for sending that along.  You may recall that I told you Robin move most of his managed accounts into cash about 2,000 points above this week's closing levels back in June or July.

 

I spoke with Robin after the close on Friday and his outlook for the market is similar to mine:  We could see the market continue its decline next week with the potential to drop in the area of 9,700 on the Dow, OR we could see the bottom collapse there and continue down to Dow 7,400.  From there, we might then see a highly inflationary B Wave return to the kind of levels we are at now, but in that wave, Landry says he wouldn't be surprised to see gold and silver, along with energy stocks, do extremely well.

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OK, so here's my personal take on what I've planned for going forward.

• I anticipate that early next week, the stock market will decline to under the 10,000 level and that, in turn, may spur already nervous (and un-prepared!) people to panic and begin bank runs.  That phrase has been popping up a fair amount lately with stories about how "Wachovia faced 'silent' bank run; FDIC forced sale" this week, an opinion piece in Forbes this week from Nouriel Roubini says expect: "Next: The Mother of All Bank Runs?"

• Against the background of a $350-billion Fed move this week and a $700-billion banker bailout by the CONgress, for a total of $1-trillion dollars spent - or about 7% of U.S.A. GDP in a single week, the NY Times News Service carried in today's Idaho Statesman understat3es thing by saying "Crisis could be at Global Tipping Point", which is exactly what the predictive linguistics have been screaming at us for more than a year now - hence my advice to friends and readers to 'flee paper assets' and get properly defensive in posture, spreading risk between banks, precious metals, physical goods, and a TreasuryDirect account, in order to maximize personal lifestyle retention potential through this period.

• I anticipate that on Monday or Tuesday something will act as the 'kindling effect" and will lead to a massive stock market decline.  I've been putting a list of potential 'sparks' together that could set off the conflagration so here's my 'short list' to which you can add your own:

  • Fannie and Freddie assets issues come to the fore again on Monday and if there's a collapse there, things could steam-roller with the financial snowball already underway.  Virtually no one in the US media is reporting what happened this week in Greece, which was forced to issue government guarantees to banks after "panic withdrawals" on Wednesday - a euphemism for 'bank runs' broke out.

  • Public workers in the State of California may be facing insolvency because short-term lending has dried up .  In warning that a $7-billion injection from the government may be needed, governor Schwarzenegger says "California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal treasury for short-term financing."

• My personal pick is that what will happen on Monday will be that the derivatives market will drive a stock market collapse.  Let me explain why:  First, you need to understand how the general "settlement day" issues will work, and the Financial Times has a good summary of the issues here.

• A note from a very well informed source at the UN Geneva sent me a terse note today that simply says "There will be fewer banks standing in Euroland on Monday morning."  That will compound/confound things if right.

• What no one is reporting (so why don't we?) is that even investment houses that think they have a clean derivatives book could find that they sudden have huge cash calls on Monday which could trigger panic selling of stocks and other assets.  The reason is this:  When certain kinds of instruments fail, the current owner is presented with a settlement demand.  But, if that first/current owner is not able to meet the settlement demand, then there is the potential fore recourse back to a previous owner.  And then, if that owner doesn't have money, another layer of the onion may be peeled back, such that I honestly expect that the unintended consequences will be a cascading collapse next week.  What's worse?  The Bailout Bill passed on Friday will not be able to stop it because the mechanisms for Treasury and the Fed to bail is not spelled out.  My term for it is "Crashcading Collapse" - when people who thought they were good have to suddenly have a fire sale of assets to raise cash.

• Once a meltdown of the stock market gets underway, I expect that the contagion would likely spread into the general public with panic withdrawals from US banks beginning, and that in turn, could trigger banking restrictions.  This is the worst-case scenario.  (Next to a terrorist attack, of course).

• Next, in order to maintain public order during those kinds of events, I expect the Bush Administration argue the need to 'enforce public order' and thus, some of the rumors of pending 'martial law' that have come from both the Internet and some Congresspersons, could come to pass.  It will be argued on the one hand that the events really do fit into a conspiratorial mold on the one hand, but a logical sequence and response by government on the other. 

• Then, on about October 15th, we get some other kind of 'military' aspect to the events about to unfold, and if I recall right, another such thing around October 25-27 - someplace in there.

• Then we get a break of a few weeks, although just as people think "Ha!  Things are getting back to normal..." then wham, along with come more or less a lock-down of financial systems in November (around the 27th/Thanksgiving period if memory serves right.

• And then, just as we get through that, we anticipate (again, remember this is all based on some pretty far-out linguistic concepts here) the 'double earthquakes of December which may (or may not) be impacting on the US mainland.  There's some drift in the data in the more recent processing.

 

So, come the end of January of next year, I wouldn't be at all surprised to see the markets  down around 7,400 on the Dow and then for Robin Landry's hoped-for "B" wave to begin, although it would likely peak in mid 2009 as the "Summer of Hell" breaks out thanks to continuing/record foreclosures on homes and continuously rising unemployment, which will be used by government for a further expansion of its powers over citizens, instead of what the Framers had in mind - government that was responsive to (and smaller than) the general population.  That ship sailed long ago, eh?

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I don't know about you, but when the stock market collapses 157-points into the close, as it did on Friday after a trillion dollars was promised this week, I do get a little anxious about events to come next week, especially when we've been talking about that date for months and months based on the work of our learned colleagues with the linguistic time machine.

 

All we can do now is watch with a kind of emotional detachment, having taken what seem like reasonable steps in order to be insulated to some extent from what could turn into panic.

 

Cliff and Igor are always pointing out the value of eating pie.  I, on the other hand, not being as relaxed about ;'living the news twice' probably over-prepare and over-react in advance of events.  For me, a double-shot of rum or vodka on the rocks works better.  Admittedly pie's better for you. 

 

Nevertheless, this morning's report is a summary of my expectations based on how I read the data leaking through from the future.  Just as the "A" wave down in the markets was the opening of the Great Depression, and he "B" wave (bounce) lasted until the onset of the secondary depression  in 1937, which all set the stage for a Kondratiev long wave trough war in the form of World War II, I expect think there's a chance that the events out around 2011-2014 could very easily be seen as that Big Ending that's in religious texts.

 

Either that, or as we go through the galactic ecliptic out there somewhere, various realities start to leak into our from other dimensions.  Along the way, UFO's and disappearances should rise because if there are really other beings who are "not-from-here" we're now in a period of intensely interesting activity here on Ant Farm Earth.

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Drop by Monday morning for our usual dose of cynicism and humor as we continue to read the linguistic tea leaves and do our dead-level best to play Nostradamus Lite walking a thin line between Chicken Little ("The sky is falling!") and the Boy Scout creed "Be Prepared!" here in what I've concluded is no longer the America of my upbringing (admitted a half century ago).

 

"Welcome to chaos in the Checkbook Republic, we'll be touching down in January-February 2009.  Have your seat belts securely fastened...." 

 

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Peoplenomics.com 

A Lifetime of Camping

Imagine for a moment that we're back in mid-summer of 1929 and we had foreknowledge of the Crash of 1929 and were tasked with giving people generally as much forewarning as possible in order that they might be able to prepare for it and help both themselves and fellow countrymen through it with the least amount of  hassle/trouble/worry/stress possible, given the epic nature of the changes ahead.  Oh, and just to make it a little more challenging, assume the words "Great Depression" had not been coined - as they hadn't. Our modern analog to this is the present day, a limited vocabulary (as labels come after the fact), we think we've got some insight into what's ahead, but the description is limited.  There are a few words that have come through the predictive linguistics which can help one prepare for whatever-it-is coming.  One of these is Diaspora - essentially the 'scattering of people to the winds' kind of thing.  So as a planning construct, how would you plan for it?

 

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Review of this week's report:

"Dear George, Inspired by today's bulletin, I looked at the business section of the NY Times, and read on page 6 Why the Bear Is Alive and Well. The writer, Paul J. Lim, talked about P/E ratios, and I felt very smug, having been made hip to them by your writing. The reporter seems to confirm what you've been saying, which shouldn't come in as a surprise. It's just interesting to see something about what I just read from you."