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A Personal Note

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Weekends: We feature more in depth analysis for subscribers who pony up the modest $30/year subscription fee.  This weekend, for example we delve into pathetic growth of patents lately and interview a Midwest broker who is expecting Dow 700 by 2007-2008.  For subscription info, click on over to http://urbansurvival.com/subscribe.htm and join up!!

Blair's Globalist Leanings...

....are becoming even more obvious today with Tony "Bombs Away" Blair saying that he will push through the new EU Constitution.  http://www.thisislondon.com/news/articles/9905101?source=Evening%20Standard.  Today Europe, tomorrow the World.  Has a kind of late 1030's ring, doesn't it?

IRS' Quality of Mercy: Zero

Companies that had major theft losses, such as Enron and WorldCom, and then filed tax returns claiming "theft losses" would have a better time looking for water in the Sahara than expecting mercy from IRS: http://quote.bloomberg.com/apps/news?pid=71000001&refer=us&sid=aByLncrqH86g

Corn Syrup=Fat?

Looks like there's at least a statistical link between the increasing use of high fructose corn sweetener and the growing waist lines of Americans scarfing up fast foods: http://news.yahoo.com/news?tmpl=story2&cid=541&u=/ap/20040325/ap_on_he_me/fit_fructose_obesity&printer=1.  Now if we only didn't have a Vice President who pushes aspartame on the president and a SecDef who sold aspartame to the FDA, maybe someone would notice...

Metals Decouple

It has caught our attention that gold and silver seem to have uncoupled from the markets.  Usually, when the Dow soars, as in yesterdays 197 point rise, the metals fall back a bit, on the thinking that investors will be taking money out of real money and putting it into paper.  Decoupling is a good thing, in our view, as it's what we would expect before a crash later this year.  Can you say "pump & dump" the markets?  Look at insider selling!

Caving in Mexico

More questions remain than have been answered, as those six British cavers have been resuced in Mexico about 200 miles north of the capitol: http://news.bbc.co.uk/1/hi/world/americas/3570269.stm.  The BBC story doesn't get into it like the local Mexican press, but there are reports the Brits had set up a satellite earthlink outside the cave and were doing something other than just recreational caving, but with the divers freed, it looks like the urgency of asking "What are British troops and scientists doing in Mexican caves with satellite gear?" will just shoved off to "who cares?" land.  On the other hand, a wise reader with lots of underground experience writes:

Good Morning.

"This British military in Mexico caves story has us wondering what the military guys are doing in caves? And who packs in that much provisions that 5-days under is no big deal? And what are those "military notebooks" they are shredding? Say what?"

As a life member of the National Speleological Society, in this fair country, I can assure you, that since the mid '50's, preparing a base camp or several, are quite ordinary. As to Brit military types, how about the French military types, that I have caved with? Or, the Dutch, German, Spanish, Russian, etc. Granted, that they were mostly not military. But, they have explored portions of Canada, the US, Mexico, Central America, etc., that we have neglected.

The biggest boob item that this group did was NOT to get permission from either the El Presidente of the State, ( the Governor); nor, it appears the Acalde, (Mayor of the Town/Providence). These men are God's in there own territory. Think of these places as Fudal Estates. The troops quartered within the state are at the sole beck & call of the Presidente, and I don't mean ms. V. Fox. I have been through this on quite some several occasions, during my active days in caving.

My personal longest time underground, was about 5 days. At our furthest camp, about 12 miles in from the entrance, we had a cast iron stove, upon which we would even bake a cake.

Much ado about nothing.

Gang War in the Oil Patch: Torture in Venezuela

Here's one to note:  The oil-company inspired governments are fomenting anti-Chavez sentiment wherever they can in Venezuela, with the latest being a report that the Chavez government used torture and disproportionate use of force when dealing with detainees (some no doubt being oil company mercenaries).  Details at http://news.bbc.co.uk/1/hi/world/americas/3571383.stm but the real back story is that no one in the oil groups wants to make a move on Chavez because he's made it very clear that he'll take a scorched earth approach if toppled.  In other words, what his forces will leave behind will mean no oil for several years.  We have also heard that a couple of other oil producers - these in the Middle East - are taking the same scorched earth approach.  Sort of a poison pill against hostile takeovers.

Meantime, down the road a couple of hours from our farmstead in East Texas (the finest place in the world to live, if you don't mind snakes and bugs, and own a pickup truck) the US security agencies have refineries on the lookout for terrorists because there's apparently communications noise pointing in that direction: http://news.bbc.co.uk/1/hi/world/americas/3568961.stm.

Still Echoing

The U.S. veto on a UN Security Council resolution that would have condemned the killing of Sheik Yassin.  The Arab world up in arms about this: http://news.bbc.co.uk/1/hi/world/middle_east/3570651.stm.  The U.S. (our poll on the subject notwithstanding) seems to be trying to please everyone and ends up pleasing no one. 

Rice Doublespeak

The White House wants Condi back in from of the 9/11 panel in order to minimize damage.  But would this be something done in public where we could get a real sense of the facts?  Hell no: Closed door deal if it happens. http://ap.tbo.com/ap/breaking/MGASGS4BASD.html  

Personal view: For a Republican government, I think I'm disappointed with a) candor and lack of press availability  - it's like the current administration doesn't get the concept of "daylight democracy" and b) the disappearing federal budget surplus which is now a huge gaping hole for my kids to back fill. Heck, I'm still counting myself as a Republican who is a strict Constitutionalist and believer in small central government.  Just how the hell that squares with the current in-crowd in D.C. I'll leave to you.  But for my money, Congressman Ron Paul is a Republican.

Political Agenda?

The supposition that an abortion would increase a woman's risk of breast cancer has been tossed out in the latest issue of the medical journal Lancet: http://ap.tbo.com/ap/breaking/MGAH7MLCASD.html.

Thursday

IRS In Trouble

Apparently back in 1993, the IRS decided that Church of Scientology followers could deduct the cost of sending their children to religious (Scientology) schooling where they learned from "training" and "auditing". No problem with that, except that IRS didn't bother telling anyone else who wanted to send their kids to a private religious school, that they could deduct it.  Now, the whole mess is about to blow up in IRS' face because a Jewish couple from Los Angeles has properly said the equivalent of "Hey!  Wait a minute..."  The details at: http://www.nytimes.com/2004/03/24/business/24irs.html?ex=1080795600&en=f1039316b68a5a4b&ei=5062&partner=GOOGLE  are worth reading because the deductibility of religious school expenditures has become very contentious with IRS squeezing hard to get every possible dime and not allowing Jewish, Christian, or Catholic families the same deal as Scientologists.  This is potentially a huge boner by IRS, as it would open the door to either massive re-filings by families claiming the credit retroactively, or the ending of Scientology's secret deal. 

In a country where everyone is supposedly treated as equal, we find the curious behavior of IRS especially troublesome, as it was applied to a "religion" invented by a science fiction writer, when called "auditing" and "training" deserved differential treatment.  And it's all a "name game".  One has to wonder if the Jewish couple in this case had sent their kids to a private school for auditing and learning instead of the three "R's" plus a bit of history and perhaps a bit of  Hebrew, if they would have been granted the same tax break.  Apparently not.  We also wonder if a Christian or Catholic family bought auditing and training instead of three R's and religious teachings, if they would have been granted the same break.

With all due respect to Scientologists, the issue is not the religion, it's the apparently uneven application of rules.  What's the old saying, "This is a free country where all men are equal, but some are apparently a little more equal than others..."

Relative Performance

We are seeing some interesting moves in the price of gold (chart above) and the US dollar index (also above).  What we find interesting is that gold has managed to hang on to some of its strength despite the move in the dollar.  There's a notion in the investment community called "Relative Strength".  The idea is that if something is showing relative strength, where it has shown relative weakness (or flatness) then a move upward may be about to unfold.  So, it is with this in mind that we're watching to see how much gold will be attacked during the current bounce in the value of the U.S. dollar.

As near as we can tell, there's not anything of substance going on that would make the dollar bounce.  The unemployment picture is same-o, the jobs picture is not improving, and above all, there's nothing on the geopolitical horizon that would suggest strength.  About the only thing that has happened has been the Madrid bombings and the killing of the Hamas leader, both of which one could theorize might result in some small amount of "flight to quality" in the U.S. dollar.  But, at the same time, we have seen repeated references to al Qaida supposedly having acquired manpack nukes and then there's the testimony about the administration's reported  handling of terrorism is advance of 9/11:  http://apnews.myway.com/article/20040325/D81H37500.html.  Condi Rice meantime, has elevated blood pressure over the allegations: http://news.myway.com/top/article/id/393324|top|03-24-2004::20:04|reuters.html.

So while there's a bounce in the underlying strength of the dollar, we're still looking for something other than happy-talk to confirm that a recovery is underway and that the dollar's strength is more than a flash in the pan and a bounce from oversold levels for now.

Security Focus

We note with interest that John Kerry, back from tripping over Secret Service agents while vacationing, is now heading for a Washington shin dig to pull together the Democratic party with a DNC dinner with Bill Clinton, Jimmy Carter, and a host of other Democratic heavyweights.  http://news.yahoo.com/news?tmpl=story2&cid=694&u=/ap/20040324/ap_on_el_pr/kerry_22&printer=1.  While it's nice to see the party unity effort, our concern involves security at such Democratic functions as we are continuously suspicious about what lengths the opponents of Democracy might go to in order to maintain the status quo, or take another shot at dismantling America.

Resource Wars - at Home!

From a knowledgeable reader:

The Philadelphia Gas Works is asking for permission to add a surcharge on all of their natural gas bills to paying customers to help cover losses they endure by continuing service to non-paying customers.  This surcharge would average $80 per year per home.  Mayor John Street feels this is appropriate because after all, we all pay higher grocery bills because of the people who don't pay for (shoplift) food. Sorry, I can't find the direct quote, I heard him say this on the radio.

 

Here are 2 links for more details if interested.

 

http://www.phillyrecord.com/2001/0412/perzel.html 

 

http://www.philly.com/mld/dailynews/2004/03/19/news/opinion/8224060.htm?1c 

We are!

For the Truly Paranoid:

Want to be paranoid about something akin to Planet X showing up before November?  Here's a snip which I received by email yesterday - a bit aged, but interesting nevertheless:

A member of our ham radio club intercepted this transmission and shared it with a few of us. He made a digital recording of it. The transmissions took place on 1-26-04 staring at 0:5:00 UTC. The frequency was 11.176 mhz, USB.

The conversation is between SNOWBALL NET and another station. We assume SNOWBALL is the network operator.

Here is a transcript:

SNOWBALL NET: Snowball Net comms check. All stations, clock sync, (pause) impact at minus 146 days, 5 hours UTC. Standby for ACC link (could have been ACD).

Burst of digital data¦

Burrow: SNOWBALL This is BURROW (could be Burro as in donkey). You are not secure¦repeat not secure¦go green¦go green¦

Bursts of white noise follow for approximately 3 minutes.

Copies of this have been posted on several ham boards and have been sent to Popular Communications Magazine.

OK, so that by itself is curious, although the author may have been hoaxing (or breaking provisions of the Communications Act of 1933 rules about unauthorized disclosure of third-party traffic, but we'll assuming hoaxing, right?  But now add a second data point to this, the odd story of British military cavers being trapped in Mexico reported at http://news.lycos.com/news/forms/printstory.asp?section=Science&storyId=840084

This British military in Mexico caves story has us wondering what the military guys are doing in caves?  And who packs in that much provisions that 5-days under is no big deal?  And what are those "military notebooks" they are shredding?  Say what?

If one was truly paranoid, they would look at the combination of the two events and synthesize that "Hey, something is causing governments all over the world to act like they know something very bad is about to happen to the whole planet and they are looking for caves (or building underground bases) to be ready to survive whatever it is that is coming (in June).

Easy enough to write off as a wild "mind game" until we recall how close the rock Toutatis will be in September (remember that Earth is within the margin of error on Toutatis orbital projections) and then there's this one:

You don't know what a blink lab is?  That's where NASA and other organizations take a picture of space, then take another picture of the same point in space a bit later.  Whatever has moved (like a rogue planet or asteroid) can be readily seen by "blinking" between the two pictures...

No, we're not that paranoid about it, but we have been monitoring the Air Force 11.175 MHz USB frequency and wonder who the Burrow is...and no, it's not Barrow (as in Alaska).

JUST IN: 11:00 AM EST

From my colleague Cliff at www.halfpasthuman.com:

Man does this get stranger and stranger. 03.25.2004

Diplomatic row looms over British cavers

By Chris Boffey (Filed: 25/03/2004)

The attempt to rescue British servicemen trapped by floods in caves below the jungle in central America has threatened to turn into a diplomatic row.

As a rescue team of Royal Navy divers was flown to Mexico, Vicente Fox, the country's president, demanded to know what foreign troops were doing on his soil without permission.

From my subscriber page

http://www.halfpasthuman.com/group/community/HPHUE_DAILY.htm

Holy smokes!  What's going on?  Why are the Brits exploring caves???????  Where does the ham radio note fit in?  Should we be looking up???

BBC Coverage at http://news.bbc.co.uk/1/hi/world/americas/3566691.stm

Wednesday

The Mob: Down Under

The headlines are pretty quiet today, so let's open our head up and ask where's the new Mafia headquarters going to be?  Like any multi-national, they have money, an improving P&L, expansion plans and so forth.  And, maybe they've outgrown their home island, Sicily.  So how about a much bigger island, for example?  An island-continent?  Even better!  http://news.bbc.co.uk/1/hi/world/asia-pacific/3563841.stm Can you say "Capish, mate?" 

Social Security: Going Broke

Say, here's something that ought to send shivers around:  The Social Security system, which was set up as a "pay-as-you-go" plan will not be able to keep going and will be bust in 38-years, with the fund going into the red in 2018 according to the story at: http://interestalert.com/brand/siteia.shtml?Story=st/sn/03230002aaa010ce.upi&Sys=rmmiller&Fid=NATIONAL&Type=News&Filter=National%20News.  The real truth of the matter is likely that it will be broke must sooner than that because of the high jinks of the Congress and President that have raided the "trust fund" and replaced its holdings with all sorts of promissory notes and paper.

9/11: Plenty of Blame for All...

Yes, the hearings were held, and no, there were no surprises.  Albright stood by Clinton's actions while Powell defended George: http://sg.news.yahoo.com/040323/3/3izjr.html.

Music Wars

There are two developments today worth noting.  First is the suit being filed against 532 addition downloaders: http://www.dfw.com/mld/dfw/business/8257027.htm?template=contentModules/printstory.jsp and then there's WalMart's new 88¢ a song service. http://news.com.com/2102-1027_3-5177937.html?tag=st.util.print

Poll Results

Our straw poll about whether the Israelis should have brought Sheikh Yassin to trial, or were justified in killing him with the rocket attack.  The total number of votes in the straw polls was 248.  The number in favor of trial was 190 or 76.6% while the number that OK'd the Israelis killing whoever "necessary" was 58 or 23.4%.  There was a bit of double voting - on both sides, which was factored out in the counting.

There were many good comments on both sides, but in the interest of saving time, I won't burden you with those, except to say that all the comments were appreciated.

Tuesday

Happy Hype Day

With the markets moving lower, and apparently about to challenge the 10,000 level on the Dow, and perhaps puncture the 200 day moving averages, I have to sit back today and get some real work done around the house - and work on finding a job.  While the decline has been entertaining, it's only a taste of what is to come.  No doubt, when something bad happens, it will be laid off on an exogenous (outside the market) shock which will ostensibly be called the reason for the decline.  But the facts are pretty simple.  Three that come to mind are:

1. The world is running out of resources and while we're not yet lobbing nukes around to acquire resource, there are all kinds of fancy footwork moves if you look.  China and Russia are dancing: http://news.xinhuanet.com/english/2004-03/23/content_1379945.htm and the U.S. invasion of Iraq was clearly motivated to some extent by thirst for oil.  With Shell being the first company to restate reserves, surely others will be forced to follow.

2. Job creation in this so-called recovery sucks.  Our colleague, Dr. Pete Markiewicz of www.Indiespace.com sent along an article from an Arizona paper that notes the new jobs being created today are, on average, paying 21% less than previous jobs:

   http://www.azcentral.com/arizonarepublic/business/articles/0315cheapjobs15.html
3. Pete also sent an article from the same paper about how world population growth is declining due to AIDS: http://www.azcentral.com/news/articles/0322world-population22-ON.html. 

Is the world's standard of living coming down?  You can do your own back of the envelope calculations, but here's a general approach you might want to use.  Quality of life consists of many things, including population and the number of jobs available (which is defined by consumption, automation, and available energy).  If lifestyles go down, markets ought to follow.  If lifestyles go up, markets should follow.

This isn't a traditional formula which has passed some rigorous peer review, it's just a general notion of how things work in the real world.  If you were a math major, you might want to brew up your own "index of direction" based on something other than markets.  You could simply do:

Q_L= J/P  

Where Quality of Life (Q_L=) equals jobs (J) divided by  Population (P)

Following this form, if you have 100 people and 100 jobs, Q_L= (100/100)=1  But if you have half the jobs, it works out Q_L= (50/100)= 0.5 

I've given you enough hints that you can work out your own approach to the underlying Jobs= consumption, automation, and available energy.

Who Knew?

The 9/11 Commission meets today to take more testimony, amidst reports that both Bill Clinton and George Bush have to bear some responsibility: http://apnews.myway.com/article/20040323/D81G48D80.html.  Just how responsible Bush was is something that voters will decide this fall.

Mailbag

I received a somewhat disturbing note from a subscriber yesterday, which I'd like to share, based on yesterday's report on the killing of the Hamas leader:

"Maybe it was the move to Texas, but you seem to be getting a little red necked and very anti-Israel. I won't renew this year."

So I responded to the reader:

"I don't think I'm being red-neck or anti-Israel. The point I was making was that when a country holds itself to be a democracy, there's usually some sort of open due process in a court of law - including presentation of evidence, etc. However, in the case of the Hamas fellow, it was presumed that he was a "baddie" and he was summarily executed without trial.

I'm not aware of any Israeli trial preceding the rocket attack, other than a governmental decision without public review. Not that the fellow didn't deserve to die, either. But it's the way it was gone about.

I note that when the US caught Saddam Hussein, he's being held for trial. If Israel is serious about gaining support in world opinion, it seems to me that holding forth to due process is central. To make a "hit" like this simply reinforces the claims of the militants against Israel - and it is nearly certain to cause still more escalation in the conflict.

I think it requires very precise thinking to differentiate between the entitlement of the Israelis to a homeland, which I support without equivocation, and the policies of Israel's present leadership which now apparently includes political assassinations without due process.

If political executions without trial constitute being anti-Israel, then the world has changed in a very frightening way. Historically, I can't think of a government that has engaged in political executions that I wouldn't judge the same.

Sorry to hear that you won't renew.

Best regards and thank you for your past support.

To which he replied:

"Over the years Israel has tried everything to stop the endless bombing of its citizens. Killing the leaders of the terror is only the latest attempt -- I'd love to have better answers, but none of them have worked. The quadriplegic was no innocent -- he ordered hundreds of bombing attacks and was responsible for hundreds of Israeli deaths. He would not have been satisfied unless all Jews in the middle east were dead. Capturing him was impossible."

On this final point, I think it boils down to a question of what is possible.  If the U.S. can find Saddam Hussein, I expect the extremely well-trained Israeli's  could have found - and brought to trial if they had a mind to - this fellow.  Secret tribunals and death squads is not my cup of tea.  That's the point I was making and I note the outcry of world opinion that said essentially the same thing:  Due process!  Or, in East Texanese, "Let's have a proper jury trial before we string 'em up..."  But by reports this morning, Israel is keeping the Death Squad approach: http://apnews.myway.com/article/20040323/D81G42U00.html.

I'd be curious how readers feel about this, so let's do a quick straw poll (results tomorrow):

Click here if you think the Hamas leader should have been brought to public trial first.

 

Click here if you think Israel's secret decision making and death squad approach is best.

Don't forget to press send.  Thanks for voting!

EO

Earth Oddities: Turns out those "mysterious" elk deaths in Wyoming maybe weren't so mysterious.  Turns out to be a wild lichen the herd was munching on: http://news.yahoo.com/news?tmpl=story2&cid=1850&u=/cpress/20040322/ca_pr_on_sc/elk_deaths_6&printer=1

So much for aliens and end of the world scenarios for the conspiracy crowd...

Monday

Israel Guns Down Hamas Boss

In a country which supposedly protects the rights of its citizens, Israel resorted to a missile attack to kill the spiritual leader of Hamas - which opens the way for a whole new round of bombings and bloodshed in Israel: http://apnews.myway.com/article/20040322/D81F6M8G0.html  Yassin was a quadriplegic. They apparently have a little different way of serving up justice in Israel than we do here in East Texas.  So look for more violence to follow. http://www.haaretz.com/hasen/spages/407399.html

AQ #2 Nuke Claims

Nothing to be sneezed at, Ayman al-Zawahri, the number two man in al Qaida, and perhaps really the #1 man, said in an interview on Australian television that al Qaida has purchased suitcase nukes.  http://apnews.myway.com/article/20040321/D81F0G2G0.html.  In case you have a few millions laying around and have a big chip on your shoulder, you might be interested to know the going price is reportedly $30-million each.

60-Minutes  Follow Up

I don't know if you caught it last night, but former White House counter-terrorism advisor Richard Clarke didn't have anything good to say about G.W. In the interview, Clarke said the Iraq invasion had nothing to do with al Qaida, http://www.cbsnews.com/stories/2004/03/19/60minutes/main607356.shtml, and that might carry some weight as he was a 30-year non-political expert who served Reagan, Bush the Elder, President Bill Stogey, and now President Oil.

Meantime, check out the British report on Jimmy Carter's breaking with the tradition about not saying anything bad about the current CIC: http://news.independent.co.uk/low_res/story.jsp?story=503722&host=3&dir=508

OK, so we're in Iraq, and that's conveniently close to 25% of the world's proven oil reserves in Saudi Arabia.  Where, as events happen, the US is pushing its agenda for political and social reform to try and "organize away" militant groups like the Wahabi.  Saudi's Foreign Minister is telling Colin Powell, as nice as he can, that the US ought to butt out: http://news.bbc.co.uk/1/hi/world/middle_east/3555957.stm.

Sorry Boeing

Low end Spirit is buying 35 Airbus jets because of better fuel economy and wider cabins than other offerings - with an option on 60-more planes: http://english.aljazeera.net/NR/exeres/FFFE9813-5886-4CDB-A0E4-3B2FF70A6487.htm.  I don't normally mention items like this, but if Boeing had picked up the order, it would have really helped the Balance of Trade figures.

Bye Bye Strong Yen

After all the talk that Japan would give up intervening in the currency markets, it looks like they will have to keep on buying dollars after all.  http://quote.bloomberg.com/apps/news?pid=10000087&sid=aYPNcE6LKsTk&refer=top_world_news

For Subscribers:

This week's report is an overview of oil bypassing, its effects on reserves, and implications of the CIA's Global Trends 2015 study.  If you're not a subscriber click here.  If you do subscribe, click here.

News from Elliott Wave International

On to Our Charts!

Write when you get rich - or sooner if you feel like it.

George Ure

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All contents (c) 1998-2003 by George A. Ure, MBA, except authors as linked or noted