---

Published Monday through Friday about 8 AM Central Time Except Holidays

 

This site is supported by subscription to Peoplenomics.  For additional content, please subscribe.

 

Long Beach Container Traffic Down 15.8%

The Shipping Collapse

This week has been quite a wild ride, hasn't it.  The Dow, which closed Friday at 8852.22 is up  401-points from last week's 8,451.19 close.  But is it really time to be wading back into stocks?  Not hardly...at least not for my account.  If you want to have fun, go for it. My outlook, based in part on the linguistics of www.halfpasthuman.com and partly on a read of the charts since 2000's high of the Dow, is for the Big Slide Down to get actually pick up speed as we head down toward what could be a panic low of 5,900 or so, before a modest bounce and then down even lower from there.

 

The PowersThatBe used this week to (here's a hip spin word for you:) 'recalibrate' expectations.  Not only was George Bush saying that results may take a little while, but the same came from Ben Bernanke and Hank Paulson as well...each starting to fess up to the notion that yeah, all that money for the Banksters might not work overnight.

 

Meantime, the AP reports that the "Fallout from financial crisis hammers housing" and Reuters says the fed's "Probe of Lehman collapse escalated: NYT"

---

Despite the miserable performance of gold and silver this week, I tend to take such price movements as just what they are: Indications of paper prices. But not necessarily an indication of what's really going on in the marketplace now, or what is likely to happen in the immediate future.

 

For one thing, the Fed's plan with Treasury to flood liquidity into the system seems to be showing up in the latest M-1 money figures out with little notice on Thursday of this week.  If you flip over to the Fed's money stock measures report, H.6 it's called, and scroll down to Table 2, you can find that the four -week M-1 average has been  1,450-billion for the preliminary October 6 period - the most recent reported.

 

This compares with a four week average of 1,396.5-billion for the first full week in September.

 

That's a four week change of 3.83%...Why if that kind of thing were to keep up, we'd be staring at 57% inflation of the money supply.

 

It's here that I stop myself and wonder if that's not perhaps a bit misleading, because if true, that would mean there's massive inflation in the pipeline.  Is the change in 13-week averages a little more restrained?  Why, of course: 16% annualized.

 

I hope you see the point:  because the government is printing up paper like crazy (and $1.5-trillion plus or minus a burger is crazy) a rational person would expect to see huge discontinuities develop in the economy.

---

The "GlobalEurope Anticipation Bulletin" which has a far better record of forecasting global economic conditions that say, the Fed, has issued a "Global systemic crisis Alert - Summer 2009:  U.S. government defaults on its debt."  Among the factors this report cites:

"• The recent upward trend of the US Dollar is a direct and temporary consequence of the collapse of stock markets

• Thanks to its recent « political baptism », the Euro becomes a credible « safe haven » value and therefore provides a « crisis » alternative to the US dollar

• The US public debt is now swelling uncontrollably

• The ongoing collapse of US real economy prevents from finding an alternative solution to the country's defaulting

• « Strong inflation or hyper-inflation in the US in 2009? », that is the only question. "

Unfortunately, my back-of-the-envelope on M-1 seems to support strong inflation in necessary goods while deflation of housing prices may continue to collapse.

 

The collapse of Iceland's economy has been a sort of junior case study in where the rest of the world seems likely to head.  Not only are shoppers there hoarding goods (like food) but the country's leadership is begging for financial assistance from countries like Denmark and Norway which have ponied up some bucks.

 

Although there was some talk earlier in the crisis that Russia would simply 'buy Iceland", in the intervening week or so, punctuated with Russian market halts, the Russians may have thought better of the idea such that this weekend we're reading how "Russia not yet ready to lend to Iceland."

 

We noted yesterday how "China Shipping Traffic may plunge as exports slow" but few people have likely figured out the personal  implications of this; the largest being the worst bummer of a Christmas ever as goods coming to the U.S. are starting to dry up.  A reader who's familiar with the docks in the Pacific Northwest reports anecdotally that most of the ships coming in from Asia in the past few weeks have been 'above their waterlines' - a far cry from what the boom in consumer goods has been like over the past few years.

 

No, this is not something I'm making up - it's NOT being widely reported in the MainStreamMedia, however, because about the worst thing that could happen to the economy would be for consumers to really (and I mean really) tighten down on spending. 

 

Fro example, the Port of Portland is out with September results and air freight is down 13.1 percent from year ago levels according to the Portland Business Journal.

 

No, I couldn't find a press release on the Port of Long Beach web site, which I guess explains why there's no MSM focus on it yet, but if you know where to go sniffing for the latest statistics, you'll see that loaded inbound Port of Long Beach container unit traffic is down 15.8% compared with year ago levels.

 

It doesn't take a rocket surgeon to figure out that if container traffi8c is down 15.8% that sales of foreign-made goods should decline by a proportionate amount and profits (remember those good days?) would likely drop farther and faster.

 

Given the economy, an even bigger year-on-year decline seems likely by the time October figures come out.

---

Given the difficulties with letters of credit lately, odds seem good that you should be worried about the 'ultimate tipping point' in the U.S. economy.  Here's how it works:

 

Usually, in a 'normal recession' when you get an economic slowdown, prices come down, interest rates on new cars drop to zero (and maybe even a little cash back) and people begin to increase their spending.

 

The "tip" occurs when things get so bad that despite all the incentives out there in terms of zero percent loans and such, people just cut off all spending and try to save cash.  Once that happens, you've got a Global Depression.

 

I'm going to keep today's report short - I normally don't do a Saturday post, but the magnitude of this story is such that it should be on every MSM outlet in the country and, in case you haven't noticed, it's not.

 

No talking heads discussing the 'tipping point', no government policy to address it (other than give money to bankers and pray a lot).  So I'll just tell you that within the next week or two, as the market slide picks up speed to the downside, that maybe you'll see the stories forthcoming then about how global trade is collapsing.

 

Remember where you heard it first.  It's the only story worth reporting from an economic standpoint and I don't see anyone else putting the larger context on it.

 

The main investment decision I'm off pondering this weekend is "When's the right time to exit the few bucks in the Treasuries and get into something that will hold (or gain) value is the GEAB expectation of a U.S. dollar default firms up...

 

Oh, and working on the reindustrializing America piece for Peoplenomics subscribers...

 

--- snip and save section ---

Coping: National Gullibility Contest Results

No, I didn't do it on purpose, but there was a mistake in yesterday's column where I decried the fellow with poor math skills and then turned around and made the same error myself.  At least I have an excuse - this column gets written while most folks (including me) are still asleep.

 

But, the math when you take 850-billion and divide it up among 200- million residents of the US (which is what would happen if we weren't giving it to Banksters) is not $450 each.  It's $4,500 each.

 

What's significant is that of the 42,000 readers who viewed this site yesterday, only a handful (5 to be exact, which is precisely on handful) wrote in to say "Gotcha!

 

I'm just chalking this up as further evidence that people by and large don't read critically and question everything coming into their heads.

 

Tough task, that; made ever more difficult by the huge amount of material that we're expected to absorb every day.

 

Still, interesting to the point of making note of it.  So not only was Friday another National Correct George Day, it now gets honorable mention as "National Gullibility Test Results Day".

 

How to Stop Conversation

So there we were - waking up to a typical married couple on weekends conversation.  Elaine had spent Friday afternoon doing some taping and mudding around a newly installed second door into the master bath so that future house guests won't have to transit a bedroom to use the head.  Did a nice job of it, but that brought up the subject of sanding between coats of mud.

"Remember that sanding screen we used to smooth up the guest bath wall so we could put up the mural?  We don't have any sanding screens on hand..."

The guest bath has a Mediterranean mural and I've been checking out a web site where we can get a large selection of other murals.  In the back of my mine, I have this idea of using a mural backdrop and building a room-sized diorama in the master bedroom.  If you click here, you can see the kinds of murals that are available....

 

These murals are generally huge...9 feet high and 12 feet wide is not uncommon, but as we discovered when doing the guest bath, the surface you put them on is best close to dead smooth.  And that's how we became experts at sanding drywall using one of those ShopVac add-on systems.

"Since we don't have sanding screen on hand, how about we take one of the spare belts for the belt sander in the shop and use it?" she wondered.

"Uh, no...that doesn't have holes in it like sanding screen, so that dust would get all over the place..."

"What would happen if we put holes in it?"

"You'd end up with a tuna salad sandwich."

"Ah what?"

"Well, maybe a fruit compote, if you put enough holes in it..."

 

That effectively ended the conversation.  Elaine dozed off, convinced I had completely taken leave of my senses, which when writing about the economy I've found to be the best possible starting point.  And in the silence that followed, I quickly filled up a coffee cup and headed for the office reminding myself to pass on the usefulness of absurdity.

---

The technique - hyper absurdity we'll call it - has other applications as well.  Growing up in the central part of Seattle, a pretty rough area back in the day, is where I first heard how to use 'creative insanity' to cope with adversity.

 

A high school friend (a fellow geek from when that was not a compliment) found himself walking down a deserted street one evening about twilight and who should come around the corner but three of the meanest, toughest 'hoods you'd ever seen.  Swinging chains and just itching for a 'good' fight.

 

Unable to run, my friend did the smartest thing I'd heard of:  He lapsed into a religious frenzy.  He started shouting and wailing.  But his preachifying was tainted.  He'd spew utter nonsense, kneel down on the ground and spew forth a few words that made sense.  Then he walked up to a power pole and began carrying on an earnest conversation with it.  All the while pretending to be completely oblivious to the oncoming 'hoods.

 

Not sure what to make of the situation, the local 'hoods passed him by. He was making a lot of noise which might draw attention and besides, my friend was obviously crazy.

---

Never forgotten the value of feigned insanity.  It's also a good mental exercise - seeing how far off point you can be...sort of like interrupting the 'logical flow' of whoever you're dealing with.

 

In a way, it's quite empowering.  People in positions of authority usually enjoy mental domination over their subjects or reports.  But, when confronted with someone who might be insane, they can't corral or contain the conversation and control evaporates.

 

So have some fun with it.  Properly done, it's like dropping a huge Zen Koan on people; their minds are momentarily 'locked up' by the logical discontinuity suddenly in their face.  which gives you, the student of the mental martial arts, a moment from which advantage may be seized.

---

Not to offend the great Haiku masters, such as Matsuo Bashō, but I've always found Haiku to be useful to still the mind.

 

Reworking Bashō's "old pond" from:

old pond

a frog jumps

the sound of water

To something that tries to 'short-out the logical brain/monkey mind" can provide hours of use:

old pond

a frog jumps

PERL script subroutines

Presented with a logical non sequitor (it does not follow) like this can be quite liberating and enjoyable.  Especially when you're able listen to a boring meeting in the conference room and insert your own absurdities into the proceedings.  Quite refreshing.

 

But wait! Which is the absurd?  The conference room meeting or...

 

Finding God Where?

Some stories, like the one headlined "Finding God at a beer festival" just grab the attention on a quiet Saturday morning.  How does this work?  Perhaps it's a story about drinking beer religiously? 

---

Send snip and save items to george@ure.net

--- end snip and save section ---

 

Pass It Along

If you enjoy the content here on UrbanSurvival (or from the mirror site www.independencejournal.com)  please bookmark it for yourself and share it with others by clicking below: