Published Monday through Friday about 8 AM Central Time Except Holidays Depending on my mood...

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As the Economy Sinks

I wasn't going to do an update this morning, but because so much happened (and didn't, in the final hour of trading Friday), I thought "OK, just one hour on an update before getting back to work on this weekend's Peoplenomics.com piece.   So one hour only on this morning's update...

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First off, according to a well-read source in the Pacific Northwest, as the economy in general sinks, people in the boating capitol of the world (Puget Sound through the BC Gulf Islands) are apparently taking matters into their own hands with 'creative solutions' to nagging boat payments:  Scuttling their boats and then letting insurance worry about the payments.  And not just in the South Sound area, where reportedly an article has already appeared this week in the Daily Olympian  ('the daily zero' to locals), but it seems to be a coast-wide phenomena.

 

And a check of the boat listings in the Pacific Northwest shows that indeed, there's no shortage of boats for sale if Santa wanted to lay a nice large liveaboard sailboat on someone.  But it's the new, too-small (or not seaworthy enough to be much use) kind that are really dropping - and now actually sinking - in value.

 

How to Play Risk

One of the problems the G-20 (Circus du 20, as we call it) will be grappling with today is if there's going to be a 'global response' to the globalist's dream blowing up, perhaps one way to start would be to come up with some kind of 'global risk map' and try to use it as a tool to sort things out.

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This is precisely the kind of 'too little, too late' thinking that I would expect from gathering political leaders together.  Nope, ain't a gonna work.  here's why:

 

A globally intertied economy economy is more like what:  A three or four dimensional computer model (such as the predictive linguistics guys use) or a flat piece of paper?

 

In other words, unless the German's really meant to say "We're going to build a sophisticated neural network and try to get ahead of the problem by probabilistically estimating which synapses in the network pose the most risk x number of iterations out, then I'd say they oughta stick to building Porsches and Krups appliances (You seen that ever-so-cool Krups Beer Tender?  Fine really fine German engineering!) and let the global economy implode because it's like trying to 'manage' a nuclear explosion.  With a 'risk map' all you get the illusion of control, but only for a bazillionth of a second and then it all blows up and hurts really bad anyway.  I'm just saying...well, you know:  the difference between blown to smithereens and blown into hyperinflation is what?

 

So Where Now Dow?

After the final hour grand slam on Friday, a number of folks I know, including the financially illuminated CS - a long time Longwaves reader from years back - are convinced that we've seen the start of the next big downturn in the markets.  Me?  No.  I'm still thinking that there will be enough nominally 'good news' out of the G-20 (like they only talk) that we will see a continuation of the rally that began mid=-session Thursday, on Monday (mid-session to late, and then we get the Big Decline starting from about the middle of next week.

 

"Oh no, that's not the right wave count..." my very smart (and he's got more money than me, so he's may be right...) friend.    He figures that the action Friday was the start of the next BIG turn down, but until we see a close that's below the intraday low of Thursday I'm staying skeptical.  Talking with Robin Landry after the close on Friday, his proprietary stew of indicators supports my case, but like I say, CS makes money, too.

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The great thing about having a friend taking the 'other side' of a trade like this is that I don't mind being wrong, because if I am, I'll look at it as supporting my friend, who is, in the large scheme of things, getting my money.  If, as I hope, the trade goes my way  (and we rally early next week, and I load the boat on put options), then I'll look at the market as forcing him to make a small contribution to my Carrera fund. 

 

My Carrera fund in my view of economics is way more practical than a 401(k) because how's CONgress gonna repo a Porsche, right?  401(k)'s?  There I don't trust 'em...

 

More Monday because we should get an early glimpse of the futures and see if the politicians do anything more than talk a good game.  I'm banking on it.

 

Clinton for What???

A headline over at Dick Morris' web site sums it up pretty well (along with his hip use of the term Clintonistas) "Hillary for Secretary of State -- is he Kidding?"

 

Well, er, actually, I don't think he is.  See, this 'change' stuff' is only talk till it's set on the table before us.

 

OO7 to $70.0?

Speculation runs that the new Double Oh Seven flick will post a $70-million weekend.  I'm planning to wait for the crowds to dissipate a bit, but definitely good entertainment.  The rework of Casino Royale was good, so why not more?  Presactly what the formulistic baroons of the film industry look  for; repeatable revenue.  Just ask Harry.

 

Call "Q"

The headline that the Pentagon has cleared a 'flying car' project for takeoff.  Definitely goes on the "You gotta get me one of these for Christmas, Elaine..." list.  But not till next Christmas maybe.. and if it's like most government backed things, maybe not for several years.  Still....

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But is this great technology or what?  Admittedly, I  think of it as the Pentagon OK'ing something that seems likely to get even worse mileage than a  big Hummer....friggin' geniuses.

 

AIDS Cure?

The medical community is all abuzz with talk that a bone marrow transplant may have actually cured an AIDS case.  This is something normally done in leukemia cases, so bears watching.  Otherwise, lots of interest in gene therapy.

 

Wouldn't it be interesting if it wasn't the marrow, but some blood factor that did the trick of curing?  Looking for a lot more research down this promising avenue.

 

Mooned

India has become (and I know you keep a running total on your refrigerator of this kind of thing) the fifth nation to land a probe on the moon.

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Boy, if there really were aliens (I mean besides the border-running kind, and the one's that pull strings behind the scenes in major world capitols) I'd sure be looking at Earthlings as a 'disease vector' that needs to be contained.  If you see a bunch of dolphins rising from near coastal waters singing  'So long and thanks for all the fish', might wanna duck...

 

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Coping:  A Warning About Frankenfoods/ Our Prion Eyes

This is the kind of email I really appreciate folks sending us to share:

"Hi George:

(I'm a retired Ph.D. biophysical chemist who is author or co-author of some 70 peer reviewed publications in respected scientific journals. I believe this study should get the widest possible publicity.)

Next time you eat any corn product made with GM corn (as most all are these days) best think very long and very hard. Check out this study... it seems a quite well done study to me.

Some science first... one of the introduced genes codes for a toxin made naturally by Bacillus thurengenesis. When insect larvae are infected with this bacteria the toxin gets secreted into the gut of the larvae. The toxin affects the plasma membrane of the cells lining the gut of the larvae in a way to cause massive leakage of water and salts from the cell into the gut, killing the larvae. I've used this bacillus for several uses on corn silks, for example. It appears not to infect mammals.

Now proteins that naturally burrow into cell membranes are funny creatures, capable of doing a lot of weird things.

So here is my conjecture: I'm guessing that this toxin may be resistant to being digested in the acid milieu of the stomach, and when in the small intestine gets into the cells lining the small intestine. It may well even escape from those cells into the bloodstream and cause mischief lord knows where.

There is an analogy here; mad cow disease and its related diseases. the infectious agent is a small polypeptide called a prion. When cows (and other mammals) are fed even well cooked meat from mad cows the prion escapes digestion, gets into the bloodstream, and gets into the brain. Quite a feat.

I'd say Monsanto is about to be road kill.

I'm sure Monsanto never bothered with animal safety tests. They just assumed that eating Bt toxin was harmless. Just like the food manufacturers assumed trans-fatty acids in hydrogenated vegetable oils were harmless.

I'm throwing out all my remaining store bought corn meal. I can make all I want from my own heirloom Bloody Butcher corn which does not have the Bt gene.

Austrian Government Study Confirms Genetically Modified (GM) Crops Threaten Human Fertility and Health Safety  Advocates Call for Immediate Ban of All GM Foods and GM Crops IMMEDIATE RELEASE (November 13, 2008) (Los Angeles, CA.) - A long-term feeding study commissioned by the Austrian Agency for Health and Food Safety, managed by the Austrian Federal Ministry of Health, Family and Youth, and carried out by Veterinary University Vienna, confirms genetically modified (GM) corn seriously affects reproductive health in mice. Non-GMO advocates, who have warned about this infertility link along with other health risks, now seek an immediate ban of all GM foods and GM crops to protect the health of humankind and the fertility of women around the world.   Feeding mice with genetically modified corn developed by the US-based Monsanto Corporation led to lower fertility and body weight, according to the study conducted by the University of Veterinary Medicine in Vienna. Lead author of the study Professor Zentek said, there was a direct link between the decrease in fertility and the GM diet, and that mice fed with non-GE corn reproduced more efficiently.   In the study, Austrian scientists performed several long-term feeding trials over 20 weeks with laboratory mice fed a diet containing 33% of a GM variety (NK 603 x MON 810), or a closely related non-GE variety used in many countries. Statistically significant litter size and pup weight decreases were found in the third and fourth litters in the GM-fed mice, compared to the control group.     The corn is genetically modified with genes that produce a pesticidal toxin, as well as genes that allow it to survive applications of Monsanto’s herbicide Roundup. A book by author Jeffrey M. Smith, Genetic Roulette, distributed to members of congress last year, documents 65 serious health risks of GM products, including similar fertility problems with GM soy and GM corn: Offspring of rats fed GM soy showed a five-fold increase in mortality, lower birth weights, and the inability to reproduce. Male mice fed GM soy had damaged young sperm cells. The embryo offspring of GM soy-fed mice had altered DNA functioning. Several US farmers reported sterility or fertility problems among pigs and cows fed on GM corn varieties. Additionally, over the last two months, investigators in India have documented fertility problems, abortions, premature births, and other serious health issues, including deaths, among buffaloes fed GM cottonseed products.   The principle GM crops are soy, corn, cottonseed and canola. GM sugar from sugar beets will also be introduced before year’s end.   Mr. Smith, who is also the Executive Director of the Institute for Responsible Technology says, “GM foods are likely responsible for several negative health trends in the US. The government must impose an immediate ban on these dangerous crops.” He says, “Consumers don’t need to wait for governmental action. They can download a free Non-GMO Shopping Guide at www.HealthierEating.org.”   Monsanto press offices in the UK and USA were unable to provide a comment on the findings for journalists yesterday.   The Institute for Responsible Technology’s Campaign for Healthier Eating in America mobilizes citizens, organizations, businesses, and the media, to achieve the tipping point of consumer rejection of genetically modified foods.   The Institute educates people about the documented health risks of GMOs and provides them with healthier non-GMO product choices.   The Institute also informs policy makers and the public around the world about the impacts of GMOs on health, environment, the economy, and agriculture, and the problems associated with current research, regulation, corporate practices, and reporting.                ### Institute For Responsible Technology Media Contact: NJ Jaeger Expert Contact: Jeffrey M. Smith Email: njmail@cox.net Phone: +1-310-377-0915 Austrian Agency for Health and Food Safety Corporate Communication: Univ.-Doz. Ingrid Kiefer Tel: +43 50 555-25000; E-Mail: ingrid.kiefer@ages.at  Links Austrian Study: http://www.ages.at/ueber-uns/presse/pressemeldungen/klarstellung-zu-neuen-er Institute for Responsible Technology: http://responsibletechnology.org  Non-GMO Shopping Guide: http://www.responsibletechnology.org/DocumentFiles/144.pdf  Genetic Roulette: http://www.geneticroulette.com

If I catch a Monsanto response to the study, I will pass it along, but about the only thing Monsanto-ish are stories like "Monsanto bolsters investment in Jerseyville facility" and such.  I'm anxious to read their side of it, so we can keep up on this.  As I near 60, I'm not too worried about my sperm count, but I've had severe allergic reactions to corn products in the past and it makes me wonder "Was that natural?"

 

And Just For fun

Cat fixes printer video...

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Send snip and save items to george@ure.net

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(Not bad for a one-hour effort, including proofing and publishing, huh?  More of that new dark roast, if'n you please?  Now, back to looking at the used sailboat ads in 48-Degrees North and gimme a hearty Saturday ,"Argghhh...  " matey... They can't scuttle 'em all, arrgghhh..)

 

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"Live on $10,000" Updated

What?  You haven't ordered the ebook "How to Live on $10,000 a year -- or less"?  Suit yourself.  We're all going to live it shortly, anyway.  I just thought you might like a heads up by reading about how to do it before you get pink-slipped.  But, suit yourself OR visit www.liveontenthousand.com or, click one of the following button:

 

 

 

Yep - still possible.  I also took a bit of additional material that was pertinent from recent issues of Peoplenomics and included them.  The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the aforementioned dollar amount, but also how to migrate up the economic foodchain if you make a little more than that and do some active savings...  Click here for the page with more details on it.

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 Last week's report is here.    For back issues of this site, click here.  (Goes back to 1997!)

 

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Friday November 14, 2008

Not A Bad Call

Several people have sent in emails asking essentially "How the hell did you know there was going to be a market rally at mid-session Thursday?" and "OMG Do you know how much money you didn't make on those call options you were going to flip between Thursday and Monday cuz your wire hasn't hit your eTrade account yet?" 

 

Well, yeah, sure, being a financial sadist I have penciled it out - 10 to 12  large, but thanks for asking...But seriously since the value of paper assets is really a free-falling safe, it doesn't worry me and I don't loose any sleep over it.  I do much better at market timing when I just don't get emotionally involved - involvement with the sparklies feed monkey-mind and once you hand it one-too-many bananas, one of three things happens to traders:  They become overly analytical in which case 'analysis causes paralysis' sets in.  Or, they get so anxious to hit a target that they get cowardly, or their lust for dough just causes plain old dumb decisions.

 

After the close on Thursday, I chatted with Robin Landry, my friend who's the best broker/analyst I know, and his outlook & mine are synched up.  The mid-session lows of Thursday were likely a small (4) finishing (in Elliott Wave counting), and based on how long this latest series of small waves have been running, I should have time after my latest wire transfer hits my eTrade account Monday to set up for what I expect will be a 'rousing decline' (if you don't my the contradiction in concepts ;-)) which I expect when we get around to (5) come the middle to latter part of next week.

 

THIS IS NOT FINANCIAL ADVICE (See my disclaimer), but depending on what happens with the G-20 this weekend, I expect to 'load the boat' with index puts with tight stops and I've got my two entry points mapped out, depending on how the rally fares.

 

All of which gets us to considering the November 14th predictive linguistics expectation that 'something big' will be happening either today or right around this time period.  My best guess (and this is my interp, not the time monk's) is that the G-20 this weekend really is going to lay the groundwork for a new global currency system.  Don't know if you caught Larry Edelson's piece on Thursday about "The G-20's Secret Debt Solution" but it's a very good article and well worth reading.

 

My 'best guess' is that when the G-20 meets this weekend, they will announce something - and I don't know what, further special meetings maybe, but it would seem (from a wave count perspective) to be something that would be enthusiastically received on Monday morning at the open.  However, as soon as the real deeper meaning of the G-20 sinks in, that would set up the beginning of wave (5) and THAT means a trip to Dow 7,200 or worse, 5,800 in short order.  Like by Christmas as I outlined in last week's "Dow 4,000 for Christmas" article.

 

In that piece, I said my 'grand strategy' would be to play the low from yesterday into Friday's or Monday's high coming up, then load up on put options and make money on a decline with the S&P, the as soon as a semi-solid looking bottom is in, wire what would be a nice down payment on a Carrera over to my commodity guy, JB, and put slightly out of the money gold calls for next summer.  I don't need to tell you that could make a whole boatload of money.  But, again, that's just grist for monkey-mind.  Still, I don't mind me daydreaming over whether my new Porsche GT-3 should be triple black or anthracite.  Decisions, decisions, decisions...Plus there'd be a huge tax bill because it would all be short-term gains.  But the commodity gains would push into 2009, so not too bad and that would give me a year to net things out.  Whew!  Ain't delusions fun?

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I'm NOT the only one who may be sizing things up this way.  A report on the Peter Cooper blog Thursday says  (be sitting down when you read this) that "Saudi Arabia buys $3.5 billion of gold in two weeks."  Maybe the Turbo isn't off the table after all.

 

Especially with reports that "China expected to shift reserves into commodities and gold."

 

OK, anthracite then.

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Fulcrum Asset fund chairman Gavyn Davies, writes in The Guardian's op/ed pages that "We must start thinking like South American dictators:  An economy on the brink of deflation needs to jettison the orthodoxies of prudence - in favour of a license to print money."

 

Can someone tell him that's exactly what we're doing over here in the Colonies with the Bankster bailouts and soon, the car bailouts?

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In the preopen today, the market was looking to book some gains off yesterday's zoom.  once done, I expect one more flight upward to hit my S&P targets just over 1,000, but hopefully not till Monday mid-session.  regular rims are fine, thanks - nothing fancy.

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One sharp-eyed reader noticed the S&P close Thursday: "...how really freaky strange...spx closed today at...911.29 (9/11 + 1929 scrambled)..."

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But hope (or is that denial?) springs eternal.  The NY Post attributes yesterday's action to "Bottom fishing: Surprise rally sends stocks soaring; Dow up 552".  It'll be interesting to see if this headline still makes sense in, oh, three or four weeks...

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Meantime, a note from my friend Roger Reynolds caught my eye as something you might find worthy...

"SOME OBSERVATIONS: 1)When Irving Fisher wrote in the mid 30's people would default on debt like falling dominos, he was correct on how depressions evolve. Yesterday an interview with a los angeles scrap metal dealer showed how it is starting. In that business contracts are by phone or handshake. But, his mid summer verbal contracts with the chinese were not honored by the chinese when the ship loads arrived. he said it was the first time in 40 years a contract had not been honored. 2)Then locally. The local ******ist home has folks buy an annuity which allows them to live at the home for the remainder of their lives. Big cash up front payment. Yet, recently the managements told several couples to pay more or move out. WHY??? Stock market problems. 3)The car companies threaten to default on their debts and declare bankruptcy. They say it will destroy the economies of some towns. BUT, all three companies could build a car for 5 to 8,000 less IF they could rid themselves of excessive debt, excessive union contracts, and some retirement burdens. In my opinion, even IF the govt loans them money they will still hit bankruptcy as the foreign companies expand without the previous burdens. Remember---about 10 years ago ford determined they could NOT profitably build a small, high gas mileage car. Yet, peak oil says that the world's major oil fields are depleting so fast that world production will drop by 1/3 in 5 to 6 years. There will be a need for high gas mileage cars. 4)In the book, A WORLD IN DEBT, published in about 1935, the author says at the height of booms people turn their money over to "middlemen" not the local banker or broker. So, they have NO real idea of what they are buying. This week National Public Radio reported: A wisconsin school district borrowed 200 million through a canadian broker from the irish subsidary of a german bank. They invested(?) the money in a collateralized debt obligation in order to earn a one percent spread and pay more health insurance for their teachers. The insured bonds included fannie and freddie and AIG, etc. The reporter says the contract is about 3 inches thick. The investment(?) is now worth about 25 million, and the Irish and german bank have to have govt bailouts. Meanwhile, the irish bank became trustee on many insured muni bonds. When the insurance companies failed and the bonds were downgraded, then a contract provision said the trustee bank had to become a "standby bidder" for bonds. They have bought a lot of bonds. BUT, in having to do so, they triggered muni offering provisions that turn 25 to 30 year bonds into early forced payoff 7 to 10 year bonds. Hundreds of muni's around the USA now have much bigger annual payoffs HURTING local finances. 5) early today, several gold/silver stocks, filled in gaps made in late october. This could be very bullish.

Click here to sign up for his free emails - almost always worthwhile and no ads...

 

This is Too Much, Alright Department

"Bush warns against 'too much' government in Markets" says a Bloomberg headline.

 

So let me get this right:  We print up waaaay over a trillion dollars and lay it on the backs of the taxpayers and now he's got the cheek to says 'too much government'?  Hand me that bottle of nitrous, wouldja?

 

The Line Up Continues

The nation's big city mayors are lining up for the federal easy money programs.  They would like at least $50 billion worth reports Yahoo.  bet me that won't inflate faster than bread prices in Zimbabwe?

 

Bush Behind Bars?

A post on the Democratic Underground featuring "Justice After Bush" with come current administration folks cartooned in jail has created quite a buzz.

 

Retail  or Re:Tale

Retail sales out this morning were almost universally expected to come in on the weak side.  So how did they come in?  Read for yourself:

"The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for October, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $363.7 billion, a decrease of 2.8 percent (±0.5%) from the previous month and 4.1 percent (±0.7%) below October 2007. Total sales for the August through October 2008 period were down 1.3 percent (±0.5%) from the same period a year ago. The August to September 2008 percent change was revised from –1.2 percent (±0.5%) to –1.3 percent (±0.3%).

Retail trade sales were down 3.1 percent (±0.5%) from September 2008 and were 5.0 percent (±0.7%) below last year. Motor vehicle and parts dealers sales were down 23.4 percent (±2.1%) from October 2007 and sales of furniture and home furnishings stores sales were down 13.5 percent (±3.3 %) from last year. "

 

Layoffs coming

"Mayor Daley: Prepare for Mass Layoffs" in the windy city...

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Hey, speaking of layoffs and such - had an email recently from a reader in one of the Top 10 markets who is putting in a $30-million apartment complex.  He's been hearing some rumbles that the bank which is backing the project may delay payments to subs.  Traditionally, in the construction industry, when this happens, the subs are the ones that get screwed.

 

So managing this big project he asked me "What's the right thing to do here?  Tell my subs that the bank may be late or freeze the project, or don't tell the subs and get the job as far along as fast as possible?"

 

Tough one, but simple when you remember some basics.  "Subs" are humans with lives they put on the line and they deserve first consideration when compared to  paper legal entities that are designed to shield owners from liability.

 

I wrote to him that 10-years from now you're not going to run into a corporate entity in some dark alley when you've been out for a few pops on Friday night.  A disgruntled sub?  One you screwed out of thousands and destroyed his family knowing that he was about to get stiffed and didn't shoot straight with 'em?

 

Not uncommon for humans to carry grudges over a whole lifetime.  Humans first.  Corporate entities last.  I've only done what in today's dollars would be a million-five in commercial space build-outs, but good subs are worth their weight in gold and then some when you need extra effort to hit a timestone.  (That's the timely hitting of a project milestone if you're not used to my language.  Why project managers insist on 'milestones' being used is linguistically dead wrong.)

 

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Coping: Good Writing

I've often been taken to task for my writing style because in the 'corporate' world, it's not...er...flat and dull enough sometimes.  being an exceptionally slow learner, I just keep banging away at the keys, hoping that every once in a while, something entertaining will come out of the fingers.

 

Still, nothing begets good writing like reading good content.  In my case, I like darn near anything written by Clive Cussler, Alistair McLean's novels, original Ian Fleming, and Jack du Brul.

 

There's good writing in magazines, too.  Favorites include The Atlantic Monthly, and the essential Playboy After Dark - definitely my kinda humor.

 

If you ever need to write something for business (a big presentation, or whatever) I recommend getting some of your favorite content.  Immerse yourself in someone else's style that you find appealing and then take up your task at hand.  Words will flow much easier.

 

Two other tips on writing:  if you're working on ad copy for almost any product, save those direct mail pieces that flood the mailbox once you've lived someplace more than a few weeks.  Read them for style (keep your credit card in another room so you're not tempted to use it).  Masters of the 'call to action'.

 

Two other great sources of entertaining writing - and these are somewhat unexpected.  www.woot.com is a website that had a killer sense of humor and writing style.  Coupled with their nearly famous "shipping is always just $5" they have some deals which are totally unbeatable (the heavier items).

 

Another unlikely is www.lindsaybks.com where you can get all kinds of 'old technology' books and some unlikely self-help notes.  "How to Extract your head from Your Butt" for example has a fine product write-up.

 

Back when I was teaching aspiring reporters how to write, I drove home the point (to their endless dismay) that people think in images and that good writing comes from the careful selection of words that create images in people's heads.

 

The more entertaining the images - or the more evocative if you're writing news copy, the better the overall effect.

 

Unless you're in the 'old paradigm defenders' fold, in which case, uniformity of thought (group think) is just was the doctor ordered.  think of the most bland and boring words you can.  Arrange them in the most boring manner possible, and you too can become a corporate PR type.  If you get really 'over-the-top' with the 'incomprehensibility quotient' of your writing, apply to the nearest law school.

 

Group-Think At the World Economic Forum

Had a long conversation with a friend of mine this week who is one of the leaders in his field. No "Oh?  he's out standing in his field, is he? 'nother homesteader?"

 

Nope, serious academic type, author of books, and what my former colleagues in High Ed would call a first class SME - subject matter expert if you have written up an institutional accreditation report lately.

 

He returned with some very interesting comments about last week's World Economic Forum in Dubai.

 

The conference, in case you didn't get invited, was held at a five-star hotel in Dubai and the WEF folks invited about 1,000 of the top thought-leaders from around the world.  they covered something like 68 different topics ranging from pandemic diseases to global starvation & malnutrition, to corporate governance and ethics (no snickering there) and pollution/resource depletion.  Some of the presentations from the conference are already showing up on YouTube if you want to go looking for them.

 

As for 'looking' my friend has been reading UrbanSurvival long enough to have his head become thoroughly full of the concepts New World Order and the PowersThatBe Be."

"I went looking for them," he explained in our chat "And amazingly I couldn't find them."

I was a bit taken aback.  "What do you mean, you couldn't find them?" I countered.

"Well, what I was trying to find was this inner circle of folks who would have the real low-down.  You know, the global overview which if I found it, would put all the craziness of the world into some kind of workable perspective.  You know what I mean?"

 

"Sort of..."

"Let me see if I can explain it better.  The people who I met were all really brilliant in their specialties, but while their information was a mile deep their ability to relate it to other disciplines was only an inch wide.

 

Everyone there seemed like they were either a top academic specialist in this, or that, and the rest were leaders from the corporate arena. I was astounded that there was no committee or group I could find that was trying to 'put the whole thing together' so that it would be comprehensible and so there'd be something actionable out of it. 

 

I was astounded that I couldn't find more real innovators.  It's like the conference was almost entirely made up of linear thinkers.  Really good experts, don't get me wrong, but they were all paradigm defenders who were firmly committee to staying inside their own boxes.

 

Everyone was talking orthodoxy  I was looking for the new way forward and I couldn't find it.  Maybe my sample was too small, I dunno.  I must have talked to 30-40 people at length.

 

The forum is a fantastic tool - great concept.  But my two-cents is that they're getting the wrong people to show up.  It's like they brought in the 'heaviest resumes' instead of the brightest innovators... If this is the way the world works, then there is only one outcome - maintaining the status quo till it's too late for all of us...."

I've had to ponder this for a couple of days because it leads to a couple of difficult realizations. yes, there really are 'PowersThatBe' but they are likely more of a patchwork/quilt work of social networks organized around this issue, or that.  Every issue has, at its core, a social network that can be analyzed. But these are likely operating in a strange competitive fashion, not unlike bacteria being grown in a Petri dish.

 

It left me with a disturbing feeling that life really is little more than throw in a bunch of humans, a collection of sinners, saints, bloodline freaks, power trippers, and just common folks like you and me thrown, as a joke by universe, into some solar-system wide cosmic blender.

 

The switch gets thrown and out comes the present mess.

"These were today's people with yesterday's answers to tomorrow's problems for the most part," my friend summed up.

If you happen to be a gazillionaire, and wouldn't mind spending $10 million or so, seems to me that a global conference of best - and broadest, and most innovative thinkers might have a better chance of arriving at an actionable set of outputs for the public and policymakers alike. 

 

I'd offer that the conference should be called "Global Mirror" and it would start by taking a serious look at humans for what we have become: paper-driven, planet wreckers that are doing with global resources what we make fun of t those lab monkeys for doing when they overdose on cocaine when the resource is unlimited.

 

Takes one to know one and the clock is running out quickly.

 

Emails of the Day

This one might be headlined: "And suddenly the R word appears..."

George, As a daily reader I had something hit me today concerning the potential bailout of GM. Chevrolet being a GM division has on all commercials for trucks "An American Revolution". This slogan is even at the top of their website www.chevrolet.com. Would it not be ironic if they DON'T get their handout. Will we truly have "An American Revolution" come next spring/summer as your webot's have been saying.

(They're Cliff's, not mine.  I*'m the rum guy, he's the pie guy...)  But yeah, starts popping up doesn't it.

 

From inside a bank:

"George,

I’m an MBA student working for a Northeast regional bank, in the mortgage industry. I’ve watched portfolios of our mortgage backed securities and CDOs plummet in value as asset prices died during the past year. Meanwhile, I have paid close attention to your site to bridge the gap between my almost junior working knowledge of the industry and the missing analysis portfolio mangers do not want you to know. It’s a bloodbath, and I cannot understand why for the any reason an entire industry would fiat wealth the way it has and not be prepared when the models failed. The looses were all in plain sight and no one but a few cared to point the finger. Recent legislation seemed to cast a pall on the short sellers, but I truly believe that they are the first line of defense against bad business practices. I suppose that’s why I keep coming back to the site. You always go against the grain. I found this beautiful article today that does a great job explaining what the hell happened. Should you have already read it then please share with everyone. Please take a look and let me know if you agree. Thank you for the many morning/ mid day laughs.

yeah - good read!

 

From another reader:

"George:

Yesterday will have surprised many, though not you (per your intended call buying). My worry of late is less about volatility ... it's about velocity. Thus far this unfolding bear has had two rallies > 20% which began and ended in just 8-10 market hours. During this series of high velocity events ... is it possible we are having our bull phase relief rallies all in the space of a single market day? I ask since so many (me included) expect a long(er) term relief rally ... and so it is increasingly unlikely to occur (or, is occurring while we catch breath and then down trend continues).

You related some dreams not long ago. On waking I don't recall many dreams (unless of sailing). A week ago I woke from a dream and the distinct singular vision transferred from sub-c to conscious was that of an old world desk calendar with the number 14 on it (Nov 14). Though not much for numerology, some numbers from the action yesterday gave me pause ... DJIA travel was 911 points low to high / SPX closes at 911 (after being ankle deep in the Rubicon at 820, below the 10/10 low) and ... another 11, SPX travel from low to high was 11%.

Too many pundits displayed euphoria that the Dow had a successful retest of the Oct/ lows. Huh? Why point to the one (narrow) index which didn't pierce its low while ignoring the two (wider) measures which did set a new intraday low, the SPX and COMP? Rhetorical question ... pass the punch (cool-aid) ... party on Garth.

Thanks to you and the fellas at HPH irt all you do for the Borg (collective) ... those who will listen.

My larder is full, ammo in the dry, staying near the fox-hole rim..."

Thanks.  May not have a column tomorrow (Saturday) because I've got to finish my solar panel install and much welding/messing about to do...come on by Monday morning early and we'll see soon enough how this G-20 thing over the weekend plays out.

 

Hosting Deal is Today

Remember that super deal on hosting I told you about yesterday?  Where Brian Carpenter of EMWD gives a discount percent that's the same as his birthday?  Well it's today...not yesterday.  I wasn't trying to prematurely age him, honest!

 

Sign up for hosting accounts here:  http://www.emwd.com/partners/idevaffiliate.php?id=107 

 

Like the Mogambo Guru asks, "Got gold?"

 

Hey!  One Last Thing...

How come The Mogambo Guru has his own Wikipedia entry and no one has done anything on UrbanSurvival, Peoplenomics, or our Independence Journal?

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Send snip and save items to george@ure.net

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Around the Ranch

If the coffee has hit you hard, you may notice our little 'news widget' that appeared for a couple of days this week in the upper right column has disappeared.  Worked fine in all our beta testing one the ranch computers (why I need five computers while Elaine gets by on one is not open to discussion) turns out that people on WebTV don't seem to see this page anymore after I added it.  So, in the interest of lowest common denominatoring (a marketing term you're welcome to filch)  it's gone.  If you like a pages full of headlines, check out the www.independencejournal.com home page which updates 24/7 off RSS feeds...

 

I am planning to try and center the daily reports on this page so they are not shoved over all the way to the left-hand margin, but with the recent shift in the election, maybe Universe is winking at me again...

 

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Thursday November 13, 2008

Heck of an Email

Remember earlier this week I made a passing mention of a Seal group being called up for something urgent?  Well, a follow-on email from a relative:

"Navy Seals Solved - Select team sent to (?) Disarmed 3 nuclear devices, team home safe. May be on national news, maybe not. Thank you for your belief."

I always take such emails with a grain or two of salt...old salt in this case, but if - as a very long shot -  it happens to pop in MSM, remember who mentioned it first...

 

What's Paulson Doing Under the TARP?

A Grand Unified theory of What's Next

I'm making a personal bookmark of this morning's report because I will no doubt be referring to it as the future unfolds.  Essentially, it's my 'best guess' as to how the next couple of months are going to play out. 

 

Unfortunately, I'm not yet able to put a sizeable bet down in the markets - because it turns out getting money into my eTrade account is painstakingly sloooow.  I used their online system to initiate a transfer on 10/7 and even after a long pleading session with their customer service department, there was no mercy or deviation from 'policy' so the first trading day I will be able to buy some options will be 11/ 15.  I know what to do different next time.

---

As you may recall, I had been planning to buy a fair number of call options for the next cycle in the S&P - which would be next week.  There'd be little time premium in them and it would be a risky play.  My thinking was that we might see the market decline down to about yesterday's close, I'd load the boat with cheap call options, and the market would promptly rise several hundred points from mid-session today and into a rousing rally on Friday.  My thought was that I'd then go massively short the market (with a longer term put series, perhaps March 09 on the S&P) and then wait around and wait for the market to go through what I expect will be a couple of months serious downside action that oughta ,take out either 7,200 or 5,800 before turning up next year.

 

That was my plan until the money flow into the eTrade account turned out to be slower than mailing a bank check, but I understand their policies and yeah, they make sense.

 

There's also a chance this is just the Universe telling me to "Wait till Monday because there will be some pseudo good news out of the G20 this weekend and the big (shortable) rally won't happen till Monday and then would be a better time to 'load the boat'.  I don't have any choice - the only thing that's out there is the decision whether Monday's boatload will be puts or calls, ,depending on how things go between now and then.

---

I'm then expecting the markets to continue their decline - and we might ,(with any luck) see oil down into the $48 range and maybe even gold down to the $550 range.  which would be just fine with me.

 

That's because once we get the market shake-out completed, I expect sometime in late winter or early spring for a massive rally in commodities to begin.  Not that it would be based on consumption, mind you; it would be based on all this newly created 'money' (he said laughingly) being poured into investments.

 

Remember the other day I told you my friend Hugo Salinas Price has been pondering the question of where are all the international bank reserves?  I don't think he'd mind my sharing the initial feedback - or more properly lack of it as he's trying to play FTM - "Follow the Money"...

"Regarding the falling International Reserves, I have not received any satisfactory answer to the question I posed - what is going on?

Perhaps the important CB's, usually purchasers of US Bonds (and British and Euro Bonds?), are now using their incoming reserve currency flows, to support their own internal financial structures (i.e. Banks), instead of purchasing more Bonds for their reserves.

If that is what is going on, just who is going to fund the US fiscal deficit?

Private purchasers are always fully invested. So, additional purchases must come from earnings which have to find a home. In the present world situation, I doubt very much if private purchasers are going to have the wherewithal to buy $2 Trillion, the estimated borrowing needs of the Treasury for this year.

So we are back to square one: monetization.

It will be very interesting to see the further development of the International Reserves figure."

And, unfortunately, Hugo's outlook "monetization" distills down to just one thing:  Serious -as-a-heart-attack inflation.  But not yet.  Next Spring and into the Summer from Hell that linguistically comes down the pike in 2009 according to the HPH predictive linguistics work.

---

My consigliore (OK, he's an attorney and CPA, but consigliore is a compliment, the other titles may not be) has been in contact with The Bond Dude.

 

The reason I bring this up is that TBD has been whispering here and the if you're looking for an indication that the bottom is in, wait for GE to collapse.

 

So out comes word on Wednesday that GE is teetering - but that they are getting (I had a hard time believing this, too) FDIC backing to the tune of $139-billion.

 

Mi consigliore's read of this was that:

• We must be coming up to TBD's line in the sand over the next few months when GE has burned through the FDIC money and...

• This is the cleaned up for polite company version, he sputtered something to the effect "GE hasn't frigging paid into FDIC and does this mean that (expletives ,deleted) Paulson has run out of the (deleted) (expunged)( (redacted) bankster bailout money?

 

We're seeing some small indications that common sense visited Capitol Hill this week, as the Born Again Spenders (who laughably claim to hold the nominal Republican label) are changing their errant ways in order to focus a little more on consumers.  Gee, where have I heard that idea floated since Day one?  Hmmm.... 

 

A little late, maybe?  I mean like after p*ssing $2-trillion down their (still keeping 'em secret) rat holes along Wall Street?  My frustration at watching the nation's retirement looted by banksters could be summarized in the old Special forces epithet "F**k me to tears..." but that wouldn't be polite...then again none of this is.... 

 

Well, since they are Lame Ducks, no reason in sight to slow down on the massive giveaways and spendaways.  ABC News rightly headlines "Want Some government Money?  Apply Now!"  Apparently, people at GE can read, and I'm just on the edge of my seat waiting for GE Capital to be given 'bank' status by the Fed.  OMG, I have got  to turn UrbanSurvival into a bank before it's too late!

 

As I sit here on the verge of blacking out from excessively high blood pressure, at least jack Welch, for boss of GE is being blunt on the bailouts - saying the focus oughta be on rebuilding America's infrastructure and likens the political move to bailout GM to the failed efforts to save Pan Am.

 

How it is that GE gets $139-billion and GM isn't getting any more than the $25 billion handed them so far has advocates of bailing Detroit claiming that "Failure of the auto industry could set off catastrophe". 

 

A little late to the party though, since that's now baked in the financial cake...just most folks don't realize how long it takes for policy disasters to crush an economy.  Things seem to be fine and then you wake up one morning and "Wham!"  Everything's ruined.  Ask anyone who lived through Argentina's implosion.

---

Disaster - especially since the globalists have tied everything to everything else, cross-levered anything that can be assigned a fictional / notional valuation - doesn't respect borders anymore.  so we can see the swath of the evolving global economic collapse widening almost daily in the headlines.  Samples?  Why not!

 

Germany has more or less 'officially' entered a recession.

 

Bank of England UK is 'very likely' in a recession.  Apparently failing to notice that Japan's dropping of interest rates to zero in the wake of the early 1990's collapse of their markets didn't do anything but generate the Gold/Yen carry trade, Chancellor Alistair Darling hints the BoE may lower rates to zero and then went on with the typical in denial of a looming Depression mantra that goes something like 'Better days are just ahead -- in 2010..."

 

And like they really needed another closed stock exchange day, the Russian market imploded to the point of closing due to falling oil prices.

 

Even those formerly rich financial centers in the Middle East are smarting.  In the latest turn of 'what goes around comes around' we note that the Kuwait Stock Exchange halted trading today as oil hit nearly 2-year lows.

---

So are we a slippin' and slidin' down the slippery slopes into the Greater Depression?  Oh yeah, almost no doubt about it.  And best I can figure, sometime over the course of late winter, we'll be at a point where the pain will turn from rampant deflation of the kind that has destroyed housing prices and caused 85,000 homes to be lost in foreclosures in the month of October alone into serious (maybe even hyper) inflation.

 

So that's my current thinking: Slide down into Feb/Mar with deflation, then a quick spin into the most horrific inflation you've ever seen where almost everything doubles in price (or more) which oughta put millions on the street protesting (and worse) in the summer of next year.

 

As one reader notes, even the mainstream is hinting at what's coming:

"There is a HUGE divergence between paper precious metals and actual physical metals, which can command a premium of several hundred percent."

Included was a link to the story "Gold May Top $1,000 in 3 years, Morgan Stanley Says."  I doubt it will take one-third that time.

---

Keeping this libretto hand will maybe help you keep a level head and Hank and Ben continue doing heaven knows what under that TARP.  I'm sure that despite the Bloomberg FOI request, they'd just as soon it was a 'don't ask, don't tell' deal.

 

I Love a Mystery Department

So I ask myself, how can the balance of trade improve while Boeing's on strike and I presume (incorrectly?)  aircraft delivery schedules were interrupted?  Shhh.  Don't ask.  Just read the government's latest:

Goods and Services

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total September exports of $155.4 billion and imports of $211.9 billion resulted in a goods and services deficit of $56.5 billion, down from $59.1 billion in August, revised. September exports were $9.9 billion less than August exports of $165.3 billion. September imports were $12.5 billion less than August imports of $224.4 billion. In September, the goods deficit decreased $1.5 billion from August to $69.6 billion, and the services surplus increased $1.1 billion to $13.1 billion. Exports of goods decreased $9.8 billion to $108.1 billion, and imports of goods decreased $11.3 billion to $177.7 billion. Exports of services decreased $0.1 billion to $47.3 billion, and imports of services decreased $1.2 billion to $34.2 billion. In September 2008, the goods and services deficit increased $1.0 billion from September 2007. Exports were up $12.6 billion, or 8.8 percent, and imports were up $13.6 billion, or 6.9 percent.

 

Goods

The August to September change in exports of goods reflected decreases in capital goods ($4.2 billion); industrial supplies and materials ($4.1 billion); foods,feeds, and beverages ($1.1 billion); consumer goods ($0.5 billion); other goods ($0.4 billion); and automotive vehicles, parts, and engines ($0.1 billion). The August to September change in imports of goods reflected decreases in industrial supplies and materials ($8.1 billion); consumer goods ($3.4 billion); automotive vehicles, parts, and engines ($0.7 billion); foods, feeds, and beverages ($0.2 billion); and other goods ($0.1 billion). An increase occurred in capital goods ($0.5 billion).

Headline of the Day Award

Every so often, we hand out a "headline of the Day" award for getting the essence of a story 'just so' in a Playboy After Dark kinda way.  today, honors go to The Drudge Report for a pointer to the "American Express shares plunge on bailout report" story that begins "All Swiped Out:"  Yeah, our kinda prose fer sure....nice one.

 

Crimes Against Persons

A friend of mine asked recently if I had seen an increase in crimes against persons yet because of the economy.  I said that I hadn't seen it yet but that it would not be unexpected to see in the headlines.  This was some weeks back - and as usual, I think my friend is properly prescient, but the FBI uniform crime stats are published annually.  Still, economic stress is popping up in stories like this:  NLV Murder/Suicide a Result of Economic Stress  As the economy tanks, look for a large generalized increase in crime, I figure.

 

About Them Lobbyists

As I was staying in yesterday's report "Checkbook Republic Run by Lobbyists" we are seeing headlines recur like this: "Lobbyists swarm the U.S. Treasury for a helping of bailout pie." 

 

We'll stick to hounding the huckleberry pie makers.

 

Author Watch

don't know if you saw this week's post by Reinventing Collapse: The Soviet Example and American Prospects author Dmitry Orlov over at the Energy Bulletin site this week, but it should be on your 'must read' list.

---

Back in my serious news reporting days, I got to interview a lot of authors and you know who'd I like to ask a question of today?  Robert Kaplan.  he wrote a book a few years back called The Coming Anarchy: Shattering the Dreams of the Post Cold War.  I read it a couple of times - because it was such a crystal-clear vision of the future world from the perspective of 2001 - pre 9/11.

 

I'd sure like to ask him what he'd change in that book, given the magnitude of the economic collapse that is gaping before us.  If I recall rightly, I think "The Coming Anarchy" was maybe a bit light on the economic catastrophe aspect of things...The vision of the future didn't get too deeply into how people would be living on barter...but it would be a fine line of follow-up questioning.

 

If you haven't read Kaplan's assessment of "What war with Iran in the Gulf could be like: Asymmetry at Sea" you've owe yourself one more cup of coffee and a click over here.

 

Best Read of the Day

I mean besides UrbanSurvival, of course: Martin Armstrong's latest (from in jail) is called "It's Just Time" and will serve to convince even the most skeptical that the 'end is nearing'.

 

If you don't know about the Martin Armstrong case, you have not been studying real (non-quant) economics enough...

 

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Coping:  A Great Deal On Hosting

Every year I try to remember to mention a few good things about my hosting company, EMWD because the owner of the outfit, Brian Carpenter has a delightful habit of selling most excellent (and scalable) web hosting at a discount equal to his birthday.  Here's his client letter:

"Dear EMWD Clients:

Nov 15th will be my 41st birthday. Now that I am over the hill, I realize life after 40 is not so bad. To celebrate my new outlook on life, I am offering a 40% discount on all new domain and hosting packages except our mailman service. This discount is for the life of the package. This is an incredible deal and should be taken full advantage of.

This Friday and Saturday would be a great time to place an order for a new domain name or a new hosting package. Let your friends know as well, and be sure to pass on to them the following coupon codes:

B-DAY01 - to receive 40% off a new domain name

B-DAY02 - to receive 40% off any of our hosting packages except our mailman service.

Please keep in mind that the above coupon codes will only be valid on Nov 14th and 15th. The discount is also good for domain name transfers.

If you or your friends are using another hosting provider, then this would be a good time to move to EMWD to save some money. We will even assist in transferring your web site to our servers for free if you want to take advantage of our sale.

We encourage our clients to post notification of this incredible sale on their forums, blogs, and web sites. If you sign up for our EMWD partner program then you can use your affiliate link to send traffic our way. If someone you send our way signs up, then you make $10 per sale. You can sign up at http://www.emwd.com/partners/idevaffiliate.php?id=107

I have appreciated all of your business and friendships through the years, and we look forward to serving you with all of our hearts in the years to come.

Kind regards, Brian Carpenter, Owner www.EMWD.com "

Needless to say I can hardly wait for Brian to age and I'm pondering how he's going to afford all that money he'll be paying out when he turns 101...

 

National "Correct George" Day

Yes, Thursdays are National Correct George Day" so here we go...

"George: Would like to hear the latest take on things from your deflationist-proponent pal. Are we headed for a period of rapid deflation followed by hyper-inflation? Thanks.

It's 2 words for all right although 1 word for although. And of course all tough is never alright...

Which is which? I selected Printer Ben as MOE, Paulson as CURLY, and Boy George as LARRY. Why not solicit votes? An honest election would be novel."

Options School

A reader sends this...

"Hi George;

I am a big fan of your Urban Survival website and have been making it part of my daily routine for the past 6 months or so. You seem to have a firm grasp on this crazy period in time through both your intuition and perspective! It is greatly appreciated and helps a lot of us stay the course. The modern day era of media speeds up both information and disinformation so it's nice to have a place such as yours for an overview and interpretation of the days headlines....... Having said all of that I am wondering (time permitting) if you would be willing to detail this $2000.00 S&P put option you are making. I am unfamiliar with "put options" but have $2000.00 that needs to be destroyed or turned into a "nice late model Carrera" lol. I usually invest based on fundamentals, technical analysis and intuition but having come out of a large physical position in gold I don't know my next move. So why not mirrior that of someone that does! Consider that my due dilligence lol! Seriously though, if you have the time I would be keen on learning your strategy. I am also fully aware that you you may be shaking your head after reading this e-mail wondering WTF! If so no worries and thanks again for the great site. Best regards

Well, you simply buy ;'put options' on the index of your choice and hope like hell you're right or your paper goes away forever.

 

Wiki ":Put option" and you find the info.  Remember, most trading accounts require you to be approved for options trading, and whatever you do, don't play uncovered options - play only options you can buy and afford to lose every single dime of your investment.  Uncovered options is how people lose big - like your home...

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Send snip and save items to george@ure.net

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Around the Ranch

I don't normally talk about things of a personal nature in advance, but this morning's column will be a little shorter than usual because today I am on the mend from having laser eye surgery yesterday.  the long & short of it is that I had cataracts taken out when much younger (ah, the days!) which were caused by (pick as many as you want from my risk list) eczema/asthma, use of prednisone when young, being around lasers and doing holograms in the basement of the UW electrical engineering building back in '67, being around high-powered radio equipment much of my life (up until then) including lots of microwave gear from the little Philco CLR-9's to the big high power target acquisition radars when I was a microwave tech rep.

 

The surgery went fine, and my right eye, which had degraded to 20/70 is now likely headed back for 20/25 - not as good as the left eye's 20/15, but much better.  What the doctor said was something to the effect "you may experience a little discomfort" and that turned out to be an understatement.

 

Nevertheless, with a strong application of several glasses of Italian vitamins (a wine called Pisano, which is a decent jug wine and multi-purpose self-medication option that's at least no worse than Prozac IMHO), I am better today, but a little tired.  The residual headache is blamed on the surgery and getting used to seeing differently, of course.

 

Thanks for the bazillion comments on the look and feel of the site in general and in particular, the new blog option.  I'm planning to keep both available, but the regular web site will continue to be the primary focus.  The blog pages will be updated after everything else is done.

 

Whether there will be a Saturday post this week depends on how it looks come the close tomorrow.  If it looks like 'big happenings' at the G20, then I'll put something up.

 

---

Wednesday November 12, 2008

A Checkbook Republic Run By Lobbyists

As the nation continues to slide into a recession that seems destined to be deeper than most, with even a few scattered uses of the "D" word (as in depression) it's heartening to see that the people who caused the problem are now at developing odds over how best to fix it. 

 

"Democrats Plan Detroit Rescue" says the Wall Street Journal's online report this morning.  But as you read the Washington post's coverage of the House consideration of Auto Aid, you get the sense that the Bush administration will dig in its heels.  Why solve things before the other (sic) party takes over when they can hide behind the bogus "fiscal responsibility' cloak after giving trillions away?

 

The absurdity of the federal policy response to imminent economic collapse might be considered humorous or comedic if it weren't for the implosion of GM shares to a 65-year low, the housing issues of Detroit, or more generally how the "US Tax Credit does little to spur ,first-time home buyers."    While the Treasury tries to run the clock against Bloomberg's suit to force disclosure of which banks got how much money, a new standard in lameness of ducks for outgoing administrations is being benchmarked.

---

All of which has me pondering (conceptually) whether I shouldn't open up a new news analytics service which would be called  "What the Lobbyists are Up To."  After all, as prove in the bankster bailout deal, these folks (estimated at 40,000 in number) really have more power, pull, and outright influence to peddle than all the taxpayers in America.

 

Nor, is it likely to change anytime soon as headlines are crossing that "Obama softens ban on hiring Lobbyists" as reported in the Boston Globe today.  Am I the only one who's thinking "Hmmm...so 'change' lasted a week?"

 

Yeah, sure, there may be an Uber Klassen of banking families of European descent and a bunch of ,bloodline freaks asserting monarchy as you figure out who's got the ultimate strings, but surely the second-level minions are the influence peddlers when you look at where the rubber meets the road.  Need an example?  I'm not sure how the Three Stooges would say it, but maybe I should spell it "Sointenly!".  "Lobbyists Swarm the Treasury for a Helping of the Bailout Pie."

 

Repeat after me: "Woo...booo...booo...booo....booo...."  A poke in the taxpayer's eye.  Except that Moe, Curly and Larry have been updated to George, Ben, and Hank, but who knows what next season's episodes will be patterned on..

 

It's paradoxical perhaps, but it wouldn't surprise me to learn that some of the lobbyists who are going for federal bailout money today didn't have a hand in successful lobbying efforts in the past to lower fleet economy standard requirements for the automakers.  ironically, it's that kind of effort that has turned around and bitten Detroit's butt, and why Japanese automakers are doing comparatively better than Detroit's Sick Three.

 

And, it's not like the problem is limited to autos.  subscribers to the www.halfpasthuman.com reports will recall that we're in a period when student loans are drying up.  But, since postsecondary schooling is such a big business (I used to be part of it) the power of the higher ed lobby is on the rise.  Check out this one:  "Higher ed lobbyists: Growing presence, growing power."  One could argue "Takes money to make money" but in reality it's "Takes money to buy influence..."

 

If you snoop around, you'll find some increased attention on this 'shadow of the shadow government' business of lobbying which more or less gets decisions made in the country.  Example:  Today in Texas, the Public disclosure commission will consider "Do bloggers qualify as lobbyists."

 

Other states, like Oklahoma, are considering rules which would bank gifts from lobbyists.

 

The key thing to consider is that the founders missed a loophole in what is otherwise a dandy system of checks and balances:  The power and growing influence of Lobbyists - the Super Citizens of America.  A fine cross of "Other People's Money", access to elected officials, and orchestrators of public opinion, they are, in my view, dangerous as a coral snake.  And like a coral snake, their damage is systemic.

 

Lobbying has been a fine growth industry, though, so nothing is likely to change any time soon.  Look at Pennsylvania, for example, where it's been 10-years trying to get an effective lobbying disclosure law on the books and still, no tough disclosure laws.

 

Goes to show you who's really in charge, doesn't it?  Around here, when I want to understand how things work in the Checkbook Republic, I just look at the size and source of the checks.

 

Messy Markets Department

"Russia weakens rouble support, probe depresses stocks" in overseas trading today.  A pile of rubble sums up the global markets, alright.

---

And most of it is paper, as noted in a recent post from my friend Hugo Salinas Price.  Looking at the numbers he offers:

"The US is on track to incur a fiscal deficit of $1 Trillion, perhaps much more, in this fiscal year. If the International Reserves are not growing, that means it will be impossible to fund that deficit. That would mean: monetary inflation in spades, in the US."

The model of the Second Depression as being deflation (as in check your housing prices) early on, followed by rampant inflation doesn't feel at all implausible.

 

Meantime, M3 - the broadest measure of money in circulation in the US continues skyward, although we have to rely on a reconstruction of the M-3 index because the Fed put the 'official' index to death a couple of years for leaking out too much information.  A move shrouded in incomprehensible gibberish about 'no longer pertinent' and such... Riiiiiiight.

---

Tomorrow, the balance of trade comes out - should be showing an increasing deficit, but just how bad, we'll have to wait and see. Longer term, I'm expect the BOT to deteriorate as the value of the dollar drifts a bit longer then tanks as the real cost of the bailouts rolls into the markets.

 

For now, it's just an amorphous global slump and dump today.

 

Sand Paper

The Las Vegas Sands Corp will be getting $525 million from CEO Sheldon Adelson to keep things rolling.

---

And speaking of Vegas - here's an eye-popper of a reader email:

"George, A relative, who has connections in Las Vegas government says the latest monthly report lists 20% of all commercial property in foreclosure. This is still internal, and may or may not be released to the public soon. Something to watch."

No confirmation yet on commercial property,. but a report from the Las Vegas Journal Revie says while there was an improvement in foreclosures in the latest month, "...preforeclosures and REOs have increased 69.2 percent and 157.6 percent, respectively, from the same month a year ago."

 

Yes, Peak Oil - Really

The "International Energy Agency calls for more investment in new projects to avoid supply crunch" says an AP story.  the term 'supply crunch' might be read as 'peak oil' by someone who's a wild-eyed speculator (like me). 

 

So....as we go into what I expect will be the year-end into late winter or early spring, you can see why I am planning to load up on oil call options in January or February...or maybe sooner ,depending on the G20 dollar decisions.

 

Not Exactly Web Bots...

But, worth noting as an advancement in using search engine information is the joint operation between Google and the Centers for Disease control.  The idea is that Google will be able to map where flu is heating up, based on the location of users who are looking up flu-related items on the 'net.  Concept:  You look up "flu +fever" and that might mean you're either sick and looking for information on symptoms or you know someone who is. 

 

Oh, sure, they promise user identities will be kept confidential.  Not sure how they handle users who like me, can exit fiber a couple of hundred miles from where I live if I'm on our private microwave-to-fiber setup, or if we're using out WildBlue connection which I think traces back to a NY state earth station last time I looked, but presumably Goog'ers have this figured in....

 

Bird Flu's Return

Meantime, the headlines out of China are that another outbreak of bird flu has popped up  - this time in central Vietnam. 

---

Here at the ranch, Elaine and I are out of the chicken rearing business for a while.  The last batch of Rhode Island Reds we bought from the neighbors decided to go home.  Reason?  They have a couple of roosters and these girls were....er....you figure it out, slicker...

 

Iran's "New Missile"

Take your pick who you want to believe here:  "Iran test fires newly-designed missile" says one headline.  yet another says: "IRGC denies testing new missile."

 

So, who is the Fars News Agency?   Their background is shown here and there's a Wiki entry here.  So do you want to believe a source close to the Iranian judiciary, or the Islamic Revolution Guard Corps?  Doesn't seem like loo difficult a task, does it?

 

Situation In Hand Department

The BBC reports fertility experts says the number of preganacies that can be created by a single donor shoiuld be raised.  Seems there's a shortage of sperm donors in the UK. 

 

A million punch lines come to mind; none appropriate for the kind of decorum we pretend to...

 

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Coping:  A Few Words About Change

Relax!  If you're reading this morning's column and you've noticed that things are not in the same-old familiar places, it's OK.  Thanks to a periodic slowing in my consulting work (most clients are doing fine, but working through the slowdown generally) I have had a little time to put on tasks around here.  A couple of them included getting this site up as a beta under Word Press just to see how it would look while another is to finish up my recording studio project here at the ranch, which includes getting a 16-channel firewire DAW put in and finishing up the ebook for Do-It-Yourselfers which will eventually populate the site at  www.instantrecordingengineer.com .

 

There are many reasons in favor of doing making the content here available 'blog-style.' 

 

Among these, there's the 'friendliness' toward search engines and RSS.  While the president site does have an RSS (& ATOM) feed posted, it's lacking and I haven't had a lot of time to go tweaking.  Might have, as business is definitely slowing around the country in ways you can feel - a few examples in a moment.  If you'd like to take a peek, head over to www.urbansurvival.com/blog.  Should be posted daily about 10-minutes after this page is up.

 

No, I have no idea why search engines would prefer to study a Word Press generated page, rather than my own infinitely more amusing and occasionally abusive interpretations of HTML, but it may have something to do with standardization.  

 

Or, more likely, it could have something to do with where information is placed on a page.  If you haven't been going to those Search Engine Optimization conferences (SEO), one of the key concepts is about 'heat maps' and the notion that the most important part of a page is the upper left corner while the least important is the lower right.   Using this logic, the trend on many optimized sites is to have content on the left (more readily indexed) than on the right, which was the way things were around here until about 15-hours ago.

 

Yes, it's an example of the shoemaker's kids going barefoot.

 

In redoing the arrangement of things, I also added a dynamic headline box to this page which will auto-update as Yahoo Business News RSS feeds are updated...so it will keep this page 'fresher' throughout the day.  I may change this to the general news feed - as opposed to the business feed - open to comments on that.

 

If I ever get enough time to wade through the templates for Word Press and figure out how to add multiple widgets (drop in parts of active code for a page to make content dynamic)  to the right panel (more likely: find a better template than the default).

 

The flip side of the blog-look is that the 'clean' look comes at some sacrifice of information density.  I don't like having to go all over hither and yon for what I'm looking for - so I want to get as much useful information in one place as possible. 

 

There are lots of elements on this page that won't just flop neatly into a Word Press page.  Plus, when I put exotic bits of code in, the ISP I use sometimes doesn't like it and locks me out -- not that that is bad - I'd rather have a tight as a knock-kneed (fill-in-the-blank) provider than one who's got aligns out saying "Hack Here."

 

A couple of notes about accessing UrbanSurvival from work.  I realize that many employers are death on accessing anything other than PTB sites at work.  These kinds of employers seem to be operating under the curious belief that a human isolated from as many inputs as possible will develop maximum outputs.  As you might suspise, I'm one of those "Don't care how you work, just so long as it gets done excellently and I stay out of your face, kinda managers.

 

BUT, if you find you can't access UrbanSurvival from work, here are some tips to try:

• Try accessing without the www. prefix.  E.G.  http://urbansurvival.com

• Try accessing via out www2. and www3. addresses.  E.G.  www2.urbansurvival.com or www3.urbansurvival.com.   These sometimes will allow military users to access the site.

 

Many ,corporate 'productivity myth' fixated web limiting services have not caught up to the www2/www3 prefixing, but that's not to say they won't.  one thing's sure though: A great number are blocking the Word Press type pages - and anything that even remotely looks like a blog.

 

Thus, the changes around here should be useful to some new readers, but at the same time, they should also continue the basic look & feel of the place which long time users have become accustomed to.

 

OK, with all that said, send comments to george@ure.net and PLEASE put the subject line "Site comments" so that my email router puts it in the right slot.

 

Use That Email Router

A couple of readers have asked 'How do you get so much done?"  These are seriously delusional readers.  I don't.  But, OK, maybe I get just a tiny bit more done that a few people who are new to computers.  Here's one secret:  Use email routing so that you can regularly get to the most important emails first.

 

Here's the general process to set up an email router - sometimes called email 'rules'.

 

Figure out what the most important tasks in your day are.

 

Set up a specific email box for each.  Example:  In my case, I have specific folders for those tasks which come up on a recurring basis.  Each consulting client has their own folder, and under these are the specific individuals for that organization.  Other folders are set up for Craig's List questions, notes and alerts from the time monks, and even the polls that I run here once in a while.  There's even a sp-ecial box for people who are having trouble downloading an ebook,  these come in with the subject line "Trouble Downloading" while Others with the subject line "Access Issue" ,make sure Peoplenomics subscriber access issues are tended to.

 

Of course, you leave the normal catch-all boxes "Inbox" and "Junk Mail".  Those are where the general emails will land.  You can then set up a special folder and route email if something comes up of importance.  Example:  I still keep in touch with several old University of Colorado Longwave contributors, so there's a LW Econ file.

 

The final step is to set up a "rule" so that things get auto-filed for you.  Example:  I have one rule that says "If something has "download" in the subject line, move it to the Download Trouble folder.  Another says "If the email has a from email address of moon@halfpasthuman.com, move it to the Web Bot file.

 

Once you get these email rules set up and run against your inbox's normally overflowing contents, you can then start to address the days work in a somewhat orderly fashion. 

 

One of my favorite business axioms is "Family first, Revenue second, customer service third, and everything else as we get to it...  In may email readers, the file folders are displayed in bold on the menu if they have unread mail in them.

 

One last hint:  Don't read an email unless you plan to respond to it right then and there.  Otherwise you end up with an inbox with hundreds of emails read but not acted on.  If you fall prey to this, at least set up a folder called 'action' so you know where to find the ones you might need to do something about later without going through a zillion emails in your general inbox.

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Tuesday November 11, 2008

And the Word Is...

I managed not to notice which of the news channels it was on Monday afternoon, but one of the 'experts' about the economy made a curious and perhaps timely, reference to the "D" word yesterday while bemoaning this economic development and that.  As a result, I've started a Google News scan periodically on the word "depression" just to note its increasingly common use as we move forward into what could be a very disappointing, like to the point of depressing winter and spring for the economy just ahead.

 

Among the 68,640 returns for the word on Google's news engine this morning were headlines like these:

• "Great Depression Lessons, but What are They?" in the Wall Street Journal online.

• "Obama, FDR, and Depression" parallels are critiqued.

• "What's selling?  The Great Depression"

• Amity "Shlaes and the Depression" discusses parallel policy missteps between the Depression-era and now.

• More contemporaneous: "Chance of depression overshadows G20 summit"

 

Unfortunately, the chances of just that occurring seemed to increase on Monday as the federal bailout of AIG swelled to $150-billion, American Express decided to become a bank in order to get in on a 'free money' festival, Circuit City filed for US bankruptcy protection, and GM stock tumbled to just over $3 indicating the hard times are far from over, and as one analyst reportedly has cut his GM price outlook for GM to zero.

 

Moreover, the whole global mood is beginning to downshift.  Oil, which showed a bit of a leveling off lately is back down to the $60 range as prospects of China's half-trillion economic stimulus has worn off quickly.

---

If I were back in school, I'd be writing up papers that would chronicle the propagation of negative news into the economic system.  The paper would go something like this:

1. Because of the federal interventions, yields on certain types of fixed income investments have soared to the 25% range.

2. We would therefore expect the marketplace to assign the stock market investments a similar kind of return, such that a 25% yield would result in a common market price/earnings ratio of 4.

3. Given that the price/earnings ratio of the Dow has been recently up in the 18-19 range, one could speculate that good investment equities could drop by 4 (the competitive PE) divided by 18 (the recent P/E) or about 22% of their recent highs.

4. he Dow could therefore be penciled out as heading from its high about 14,100 to perhaps 3,130.  More broadly, the S&P 500, which has been as high as the region of 1550, could be headed for the 341 level.

 

One of the characteristics of faculty advisors, mutual fund owners, and those who lose the majority of their net worth in an economic depression is denial. "That's just theoretical stuff, George...with the Fed and Treasury firmly in control, they won't ever allow things to get that bad."

 

But I'd counter with the observation that yes, it really could.  To prove it to you, I'd trot out Starbucks as pretty good example case of a company which is among those to 'first arrive' at the forefront of the yield repricing dilemma.

 

If you ,take a look at the overview of the company, you'll note that yesterday's price was a bit over $10 while if you look at the five-year chart, the company traded within a few coins of $40 per share.

 

This morning's $9.50 bid on the stock, divided by the $39.63 high a couple of years back is a loss  of more than 75% from its highs.  What's worse, "Starbucks to slow growth as profit falls" in the WSJ today notes SBUX earnings have falling 97%.

 

I don't mean to sound like I'm picking on Starbucks - I'm not.  In fact, I think Howard Schultz is an excellent CEO and I'll take a split-shot double Americano tall with a shake almost any time. 

 

My point is that Starbucks is deep into the repricing mode, as in General Motors.  GM which was down to 3.36 at the close on Monday was at 42.64 on a two-year chart.  GM has lost 92% of its value.

 

One could argue that what's ahead of us - as a nation and as a world - is a dramatic repricing of all shares to these kinds of levels.  I have to tell you, I get a chuckle out of CNBC's graphics layout which boldly proclaims "The New Economy" in the lower left of the screen at times.  Yep, I reckon they're got either a fine wry sense of humor or they're more delusional than a dyed-in-the-wool fund manager.

---

Meanwhile, the layoffs are spreading. there's a report out of KSLA-TV in Shreveport that the US Post Office may be planning, for the first time in its history, to lay off 40,000 workers, or about 5.8% of its workforce.  Among strategies being tied:  Early retirement for those over 50 with 20-years, or more, of service.

 

It's all quite sobering to see it arrive, as I've been writing about for nearly a decade, but the Second Depression certainly seems to be upon us.  Not all the news is bad - yet.  There are still the occasional items about how this company, or that, is actually benefitting from the change of lifestyle.  McDonalds says are up 8.2% for the month.

 

I'm just guessing there's more to it than just having cheaper coffee than Starbucks.

 

Another Bot Hit

Meantime, a reader who caught "the AMEX turns into a bank in order to get money" story, and sends this...

"Evening George,

Check the news at link below. Doesn't this start to confirm "It is within this period from late November onward that the [credit card system] starts to [grind to a halt]. " from the Alta 709 Part Six release on Oct 18th??

We've seen their debt downgraded and now they're becoming a Bank Holding Company so they can get money from the Fed Window."

Yep, close enough.  Remember that a lot of the linguistic pointers are to shifts as opposed to a specific single shift.   December twin quakes are examples of specific events, while the October 7th financial meltdown turn, the credit card system grinding down, and the pending resumption of  emotional release language on November 14th (+/-) are more about sweeping change. 

---

Me?  I haven't had my credit card limit lowered yet, but I keep the balance at $0.  I won't be surprised when it comes, though, as part of a tightening of the screws.  What's the old saying?  A bank is willing to lend you money as long as you don't need it?

 

Missing Bomb

Turns out the US lost one of its nuclear bombs beneath the ice of northern Greenland in 1968, reports the BBC.  Darned interesting read...

 

Yankees Go Home Department

US anti-drug operations are running into bumps in Bolivia, Ecuador, and Venezuela, reportedly because the drug warriors were stirring up political opposition to local governments.,

 

Gee, imagine that:  US forces stirring up dissent in countries with substantial energy and natural resources.  Who'da thought?

 

Admen Changing Up

Used to be that sex, seduction, and high end-oriented television ads ruled.  But, says the NYT Times this morning, thanks to the changing economy it's now "Goodbye Seduction, Hello Coupons."  You just know times are bad when sex isn't selling....OMG are things that bad?

 

Happy Anniversary

This is the 90th anniversary of the end of WWI.  If you were a soldier in WW I, you're welcome to come by for a shot of #7 - on me.

 

Not So Free Speech

The headline that in Burma, a "Blogger jailed for 20 years over poem that mocked Burmese dictator" reminds us how important the right to free speech is.  Don't even need a soap box to stand on, but it does help if you have connections with a radio host or own a string of newspapers...

 

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Coping:  Quakes Rising

As of this morning, we are sitting about one month in front of what the predictive linguistics of www.halfpasthu,man.com show to be two very large nasty ugly earthquakes that pop out of their modelspace around December 10/12.

 

I mention this because of a dandy chart that popped up on the "Horizon Project" web site this week (click here to see it) that shows major earthquakes (involving loss of life) have been going up dramatically.  Also, read the short accompanying article.

 

Amidst the data we also notice the timing of something SoCal emergency preparedness groups are calling the "Great southern California ShakeOut" which happens on Thursday.

 

The timing may be coincidental, but when Universe provides a whole lot of clues, I sometimes actually get off my duff and do something.    Despite living in a relatively earthquake-free area, we will, nevertheless, be putting L brackets on some new book cases and taking other measures to ensure that the 'big stuff' doesn't come off the walls in a harmful way.

 

Living on a sailboat for years taught me the value of having everything in the boat tied down in such a way that the boat could be turns 45 degrees, either direction, shaken hard, and have no visible impact.  True, that's hard to do for a house, but a little shock cord or bungee here and there for the big stuff is actually on my agenda.

 

I wouldn't presume to tell you what to do, but I'm refreshing the stored water and a lot of other activities that are directed toward an increased level of readiness.  Never know when it will pay off.

 

Trouble for Detroit

Emails like this one are worth passing on:

just got this today from a friend in Detroit, no surprise, but it supports the mass unemployment theory coming down the pike.

> Everyone at Daimler Chrysler got offered voluntary separation > packages. 50K plus 25K car allowance for 10 years or under and 75K > plus 25K car allowance for everyone 15 years or more. She’s got 21 > years in. You have to take it all in one sum, taxable this year. > They’re cutting 20 plus percent across the board after that so if you > don’t take the package you could get snipped with nothing. Such a > heart wrenching decision for some – especially those too young to > retire but too old to be that marketable in this economy.

looks like it's gonna suck and soon.

No, not too much that's actionable here, except I would sure not be in a hurry to buy real estate anywhere but especially Detroit, for some months yet.

 

No Next 9/11?

A former private-sector security analyst sent a very thoughtful note in response to the Next 9/11 article on Monday:

Dear George,

As a former counter terrorism expert (private industry) I have to disagree with your comments about Al Q cutting a deal with Russia. Your viewpoint reflects a typical simplification of how this organization works.

 

They are a “Holy” cause and would NEVER compromise their religious principals to make a deal with a secular government. They believe there can be NO middle ground (kinda like the Neocons LOL) Not saying they wouldn’t purchase weapons from rogue elements. Their ROOTS trace back to the Muslim Brotherhood (March 1928) in Egypt which attempted (and still tries) to overthrow the Muslim government there. It did not start as an anti-Western organization, a fact that is certainly lost among Americans (and security analysts)

 

They are religious purists who feel they need to cleanse and purify the world in order to heal it. Their mission is to reestablish the Caliphate (see below) And yes, they really believe that. Let me give you an example. My Israeli sources pointed out that when donated money from America goes to Hamas that about 50% will actually arrive.

 

Why? They are more political and maybe mafia style in their dealings. Not a Holy cause. The sources also pointed out when the money goes to Al Q that not ONE penny is missing. I would also point out that it took Al Q 8 years to plan and execute from Trade 1 operation in 1993 to the Sept. 01 operation.

 

Were there easier targets – absolutely. BUT once again their strict ideology was in play and they would stick to a more difficult symbolic (in their eyes) target than an easier one (say a football game or shopping mall). I believe that while it is easy to recruit poor and misguide fools for operations across in countries “over there” for suicide missions, that is must be much more difficult to recruit intelligent operatives (such as those who hit over here) that can navigate the American system and the more sophisticated modus operandi necessary to carry out an attack here.

I sure hope that's a good assessment.  this being 11/11,  I will nevertheless be a bit 'twitchery' today.

 

Tech Times

Movies are always interesting when set in the future because once we get there - the future - we can step back and see how the movies did in predicting what was to come.  Jules Vern is an early case in point in some of his works, but a little more on point today is the article in Wired'

s coverage:  "Six real gadgets Minority Report predicted correctly."

 

What the movie missed was the future-telling technique.  Instead of three baby/children/whatever they weres, we got a grouchy pie-eating time monk and his side kick...

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Send snip and save comments to george@ure.net

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Around The Ranch:  WordPress?

A chat with our ISP (who will be having one heck of a web site hosting special for his birthday later this week - more on that in a day or two) suggested to me that I consider rolling the UrbanSurvival daily reports into a standard blog management package like WordPress.

 

He noted that it would take care of a lot of the site management issues (which I've reduced to near nothing anyway) and would make this site more user friendly, search engine-friendly, and a host of other items (better RSS integration, for example).

 

So here's the question:  Any comments on rolling the content from a ,site-oriented to a blog post type site?  Do you think it would increase or decrease the number of people visiting?

 

Click here to send comments.

 

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Monday November 10, 2008

Another 9/11?

Not that we don't have enough to worry about, what with the economy seeming to surge, the futures pointing up, but perhaps that is largely based on what I told you to expect last week - a renewed call for more funding to be pushed into the failing automakers, but nevertheless, the timing of a new attack on the West would be, to say the least, "convenient" this week.  Especially given that the G20 meetings may try to bust up some of the US dollar's supremacy as the global reserve currency.

 

Specifically I refer to the curious piece reported on the web site News from Jerusalem headlined "Warnings from world leaders all within 72 hours."

 

Maybe it's just the 'old newsman' in me being overly worried, but there are a number of items floating around the inbox that give me pause.  Little things:  A Seal's family advising that their son is being rushed back for expected action this week, The prime minister saying "Now is the time to build global society" and the NY Times revelation today that a previously undisclosed secret order has allowed for additional attacks against al Qaeda that have not been publicized.  Over the weekend, the UK's Sun headlined "Bin Laden video alert for Obama."

 

Plus, there's some discussion in the UK that the government might seize power to censor media coverage of items deemed 'national security' should they get expanded powers being sought.

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Indonesia is on alert as a group of three extreme Islamists were executed.

 

And then there's the matter of the 'military' aspect to be equal to, or at least nearly so, the significance of the economic mess.  You may recall that the military aspect was supposed to follow the onset of economic disaster by a week or so, but the timing in HPH modelspace is not precise. 

 

True, the Russian nuclear sub accident that killed 20 is significant.  Besides filling in more of the linguistic 'hole' under military, it also gets me to asking a familiar question:  "Why do they keep building new nuclear subs unless there's some plan hidden away that at some point they plan to use them?"

 

And we see Iran is predictably saying the Bush administrations efforts to cobble up another Mid East peace plan at Annapolis recently was a failure.

 

then there's that 2-million, 2.2-million, or 22-million number floating around modelspace.  Maybe it means something, maybe it doesn't.

---

Let's think about timing for a minute.  Who would stand to gain what with an attack on America between now and the Obama inauguration in January?

 

If you're a conspiracy analyst, you'd say that an attack prior to the G20 meetings in Washington would derail plans to set the USA dollar aside as the sole global currency.  Obviously, if a conspiracy buff were looking at a theoretical time for an attack on America, it would come while the market is in a bit of a rally - so early this week might fit.  Oil's up a bit, as is gold, but is it meaningful? 

 

And there's also the discussion in HPH modelspace about a pending "lockdown" in the financial markets.  We're all old enough to recall that in the wake of 9/11 the markets were closed for how many days?

 

While we have no way of knowing what would go on in the mind of Osama bin Laden, one might suppose that striking at the USA in the election to inauguration period would be a last blow against the Bush administration as well as the neocons, who've been objects of the term 'crusaders' if my recall of past al Qaida demands is right.

 

There's also the matter of quid pro quo - who would benefit from an attack on the West.  Obviously, bankers would, as an attack would provide a convenient scapegoat on which to hang the trillions in losses being racked up as retirement account returns have falters, fallen, and disintegrated.  But there are others, too. 

 

Russia, for example, in a little-noticed position, may be facing a ruble devaluation reports Bloomberg.  An attack on the West that seriously damages America, might have a salutatory impact on Russian economic prestige.  And you saw where China this weekend rolled out a more than half-trillion dollar stimulus plan?

 

the difficulty with analyzing a potential terrorist threat is that is can play at several levels.  On one, the terrorist themselves benefit in focusing public attention of their cause and demands.  But at a subtle level, there are those countries in the global community which would also benefit from ending US global hegemony.  I'd guess in the 7-years since 9/11, al Qaida would have found ways to communicate with a number of potential belligerents, including those country which keeps making nuclear subs and which just tweaked the Bush administration's nose in Georgia. 

 

Almost invisibly to the West, it's 'game on' for regime change in Georgia.  What a military analyst might highlight as a LIC (low intensity conflict) continues in the region with most recently a couple of Georgia policemen being killed in a land mine blast near South Ossetia.

 

Most of Russia's southern tier is Muslim-oriented.  Given that Russia has been through periods of war in places like Afghanistan and Chechnya, low the Georgia border region, too, I'm given to wonder what it would be worth to Russia to strike a deal with those who would attack US in return for a promise of non-hostility on their southern tier?

 

It's there in the literature, if you read deeper than surfing 30-second sound bites - plausible deniability for Russia.  It's there between the lines in books like One Point Safe ,  Smuggling Armageddon: The Nuclear Black Market in the Former Soviet Union and Europe and The New Face of Terrorism: Threats from Weapons of Mass Destruction just to get your research going. But, it's not like Pakistan or North Korea couldn't be thrown into the mix as well.

 

Nor would accessibility to the US be difficult, sine the Bush administration has failed to close the border and the low intensity conflict (e.g. border war) continues there.  Just this weekend, it was reported another "Four die in shoot-out near Mexican border."

 

As I outlined in last week's report, I may through some money down on put options this week, if my wire transfers get through quick enough.  But that was all planned before I started noticing this other level of activity.  With any luck, the astro-econ folks, like Robert Hitt (www.astroecon.com) will be wrong about 11/11 tomorrow, which has assorted bad juju associated with it.

 

Rally today?  Pardon my yawning.  Around here the focus is much more on getting a clear enough vision of the future such that market direction and the occasional trade to keep monkey-mind entertained is much more appealing than getting worked up over a couple of hundred-point pop today.  Far more important to accurately assess the risk of another 9/11 event. 

 

Those professionals who work for the government understandably can't share their output, so we're left to speculate on our own.  Without the time to take up a thorough treatment of 11/11 under Chaldean numerology, I'll have to be satisfied watching the headlines scroll by and try to sense any predictive value there....

 

Did I mention operation Vigilant Shield is underway Wednesday?

 

Treasury's Transparency B.S.

Yup, the Bush administration is at it again - or is that still?  Refusing now to disclose under a Bloomberg news Freedom of Information Act filing just what the beneficiaries of the Fed Bailout deals put up in the way of 'securities'.  Say, you don't think they're trying to hide something, do you?  Hmmmm?  Quote from the story:

``It's your money; it's not the Fed's money,'' said billionaire Ted Forstmann, senior partner of Forstmann Little & Co. in New York. ``Of course there should be transparency.''

I may not be a billionaire...but I think Forstmann's dead-to-nuts on.

 

Still MORE for AIG

Meantime, as we watch the 'line up at the federal trough' for easy dough, we notice that AIG has elbowed its way back to the front of the line and is trying to get another $40-billion of easy money.

 

Good news?  Do you think gold's climb up today has anything to do with the prospect of printing up all this new money?  I figure enough has been printed now to at least double the metals over the next year.  And that's before the G20 kicks down the buck.  Oh boy....

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Reader Story:

"My mother in law had a small annuity with AIG and decided to surrender  it and put the money in treasuries. Well, we filled out the simple  form and 3 weeks later she received the check. She deposited it and 5  days later wrote a check to Vanguard. Low and behold, the check  bounced...."in lieu stop payment". We called AIG and they said check  was sent out in error and they would be sending her a new form to fill  out. WTF? The check was for the proper amount."

OK, mistakes happen.  BUT I would expect that the AIG money from Uncle is being quickly deposited against collateral calls on CDS where the bears (hedge funds for the most part) are demanding additional deposits as the value of the bonds goes down because yields went up...or so I hear. 

 

But Seriously: On what planet that you can name do insurance and annuity claims have more importance than billionaire hedge fund calls?

 

"Big Bang" Theory

Seems the new Obama administration is planning to push for a huge package of reform right at the outset of the new administration in January.

 

Meantime, as we told you to expect last week, the democorps are lining up the money-feed of Detroit to keep the auto industry alive.

 

Global What?

National Oceanic and Atmospheric Administration says so far this year, most of the country has been experiencing below normal temps:

 

No snide remarks about Al Gore - who I'd bet gets a cabinet-level job as, oh, Secretary of Interior or heading up EPA maybe?  Secretary of State under an environmental banner while we strip what's left of global resources from third...oh let's not go there.  I know, I know, CO2 levels are extreme.  But that could be cold, too...not just heating.  Lack of sunspots /wimpy sunspots mean anything to you?

 

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Coping:  Really  Really Good Science

Speaking of the environment...Every so often some really, really good news comes along, and even better when it's about what a friend has been up to....  

 

I'd point you to the announcement last week out of  Vanderbilt University that a new technology - Dynamic Gas Scavenging System - has been developed by Dr. James Berry, who is a professor of anesthesiology at Vanderbilt.  What he and Drs. Leland Lancaster and Steve Morris have invented is a way to recycle anesthetic gases.

 

The long and short of it is that this allows doctors to begin recycling anesthetic gases.  Why do it?  Well, at $2,000 a gallon, anesthetics are expensive.  By capturing the out-gasses and redistilling them back to FDA new gas specs, the price of gases should come down a bit over time once the new technology is deployed.  Near 99% efficiency, too.

 

Good for recycling, good for environment, lowers costs...about all that's missing is MSM picking up on it. Not that it would be the first they'd missed lately...

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