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A U.S. Pull Out?

There's a story in al Jazeera this morning that Paul Bremer has said something that sounds like what might be the first trial balloon about a U.S. pull-out from Iraq.  The story at http://english.aljazeera.net/NR/exeres/91F564CD-F1C5-4457-A0E6-21B15D33BE89.htm  includes this:

"If the provisional government asks us to leave we will leave," he said, referring to a post 30 June administration after the handover of sovereignty.

"I don't think that will happen but obviously we don't stay in countries where we're not welcome," he said at a working lunch in Baghdad with Iraqi officials from Diyala province. "

We don't think a pull-out is likely.  In fact, sources have told us that the U.S. doesn't even have a withdrawal plan because top brass including the SecDef don't want to even entertain such a thought.  Further, the provisional government is U.S. appointed so it's likely anyone who would ask the U.S. to leave would quickly be removed from a position of influence. Still, the Arab press is gobbling up the comments and they're sure to fan the flames of conflict.

Pluses and Minuses

Isn't it Spring?

From FEMA's daily updates, we note that it doesn't seem very spring-like in many parts of the country - especially the snow in the nation's mid-section that causes us to worry about farm harvests later this year:

Spring Storm Produces Tornadoes, Heavy Snow, Hail And Rain

A spring storm packing tornados, heavy snow and rain tore through eastern Colorado and Kansas, damaging property and shutting down schools and roads. In Texas, separate storms developed over the San Antonio area Thursday and moved north and east producing as much as 12 inches of rain. In Bryan, Texas, at least two homes were destroyed when a tornado moved through. A rescue team was dispatched to Hearne, about 120 miles northwest of Houston, to help people who were stranded by the flooding. Some people had to be plucked from trees. National Weather Service meteorologists said the Colorado and Kansas system spawned as many as a dozen twisters as it moved east across the two states on Wednesday night. Up to 14 inches of snow were reported in parts of Rocky Mountain National Park in Colorado on Thursday. Jamestown, a mountain village about 20 miles south of the park, reported 10 inches of snow. Many foothills towns received about five inches. No injuries were reported from any of the storms. Three homes east of Attica, in south-central Kansas, were damaged and a section of U.S. 160 was temporary closed because storm debris clogged an underpass. Rains flooded some low-lying areas in three Kansas counties. In Colorado, two twisters touched down Wednesday night, destroying a windmill and flattening trees near the Kansas line. Hail of up to an inch in diameter was reported. Welcome rain fell on drought-parched lawns and fields on the eastern edge of the Colorado mountains. Rain ranged from half an inch at Fort Collins to 1.17 inches in the north Denver suburb of Northglenn by Thursday. (National Weather Service, Various Media Sources)

Flooding in the Southwest and Gulf

Thunderstorms bearing straight-line winds and heavy rains moving west to east across the southwest caused localized flooding across Texas and Oklahoma. Over 12 inches of rain fell in Hearne, Texas, midway between Dallas and Houston, forcing residents to flee this town along the Brazos River. Statewide, about 170 homes were damaged and ten people injured across Texas in Thursday's storms. A flood watch remained in the area early Friday and more rain was predicted. In Oklahoma, severe thunderstorms, torrential rain, and strong, straight-line winds left damage and flooding across the northwest quadrant of the state in Tulsa, Shawnee, Broken Arrow, and Coweta as well as Creek, Delaware, Mayes, and Wagoner counties. Over 20,000 customers were temporarily out of power. One child was killed in Oklahoma in a storm-related automobile accident. Heavy rains in Louisiana generated localized flooding, sporadic power outages, and cyclonic and straight-line winds. There were no injuries or deaths reported, however at least 20 persons were evacuated from their homes and 8,000 customers lost power during the storms’ passage across the already saturated area. (Various Media Sources)

CA Fires Continue

A cooking fire set by a hiker flared out of control and spread across 1,200 acres Thursday in northern Riverside County. About 450 firefighters, aided by 15 aircraft battled the blaze, which started Wednesday night along the Pacific Crest Trail. The fire was about 15 percent contained by Thursday afternoon.

The blaze in Whitewater Canyon burned in rugged terrain about a half-mile southwest of a fish hatchery. It did not threaten any homes, but firefighters closed about a three-mile section of the Pacific Coast Trail between Whitewater and Cottonwood canyons. (Various Media Sources)

Power Outages In The Aftermath Of Spring Storm In North Dakota

Langdon residents estimated they got about seven inches of snow from the storm this week, which also brought strong winds and heavy ice to the region. Minot, Rolla and Crosby each reported around eight inches of snow. Cold temperatures accompanied the precipitation. Cooperatives from North Dakota and Minnesota sent workers to help Cavalier Rural Electric restore power after service was cut to about 900 of its 1,200 customers. The storm toppled hundreds of the co-op's power poles. Preliminary estimate pegged damage at about $1.5 million. It could take about two weeks to restore power to the remaining 700 customers still without electricity. In Petersburg, ice fell from a 1,500-foot transmitter tower and cut a gash in the roof of a Prairie Public Television building, causing water damage to equipment inside. (Various Media Sources)

http://www.fema.com/emanagers/2004/nat051404.shtm

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Thursday

The Berg Controversy

I don't know if you have been watching the television coverage of the Berg case, but there's a very interesting schism in the reporting.  On the one hand, CNN showed some tape yesterday of Berg's family on Sunday in which they  said that Berg had been in U.S. custody prior to his death, but yesterday, government officials were saying that berg had not been in custody. It's potentially a contentious point: http://english.aljazeera.net/NR/exeres/096E3A97-49C8-4C13-A055-EFA66A609E4F.htm  The video of Berg's family talking about his detention does raise a few questions - his abduction immediately after release is either very bad luck or....

Stumped

Meantime, the BIG event of this week that's being underplayed for reasons beyond us is the U.S. making demands of Syria to halt the Islamists who are comiong over the border to fight in Iraq: http://news.bbc.co.uk/1/hi/world/middle_east/3710757.stm  Yes, it would mean a big redeployment and perhaps more forces, but Syria talk as a "next target" is popping up here and there.

Another Double Whammy

Retail Prices and Wholesale prices are both going the wrong way. A short summary at http://biz.yahoo.com/rb/040513/economy_2.html among other things that retail prices were up an more than an 8.5% annual rate, but then they spin things by taking out food and energy to come up with a more Bush-friendly 0.2% monthly rise in prices.  Of course, being residents of the real world, you already know that living without food or energy is sort of like saying life is a lot less work if you don't breathe..

Read Less, Think Less

Book sales in the U.S. are down - http://biz.yahoo.com/ap/040512/publishing_declining_sales_17.html With everyone watching TV, X-Boxes and whatever, there's not much time left for digesting novels and the like. 

Another Scientist Weighs In

On the movie the "Day After Tomorrow" which opens in a few weeks: http://news.independent.co.uk/world/science_technology/story.jsp?story=520723 Basically saying some parts of the movie are realistic, while other parts stretch things a bit.  Still, our hat's off to Art Bell and Whitley Strieber who got the ball rolling with their book about the potential for a global super storm.

Speaking of Movies

We note with interest that Disney m ight make a deal to allow distribution of Fahrenheit 9/11 - Michael Moore's latest movie.  http://biz.yahoo.com/rc/040512/media_disney_moore_3.html Seems to us that public outrage with the defacto censorship, under the guise of corporate decision making, was becoming all too apparent.  I'm wouldn't bet against Disney pricing it so high as to make the film undistributable...

Mexico Movies

One last movie note today: Go check out the reputed UFO pictures taken by the Mexican Air Force using infrared imaging: http://www.ktvu.com/news/3298166/detail.html   Are they real?  Probably.  From another planet?  Probably not.  We've long suspected that UFO's click into our space-time worldline from another dimension more than another place.  Seems to fit available facts better, including all the historical data, including nursery school stories and fairy tales like "trolls under the bridge" that sound like something waiting to pounce out and mutilate cattle...yeah, interdimensional makes more sense than bending physics.

Upscale Moscow?

You might think of Hunt's Point/Medina (Washington) as land of the billionaires, or maybe Warren Buffett's neighborhood in Omaha.  But says Russia's press, check out Moscow when you look for most billionaires: http://news.bbc.co.uk/1/hi/business/3710977.stm

From FEMA's Daily Briefer

3.2 Magnitude Quake Near Palm Springs

An earthquake measuring 3.2 occurred some 17 miles southwest of Palm Springs, CA at 2:04 AM EDT. Within the hour preceding the quake there were 5 smaller temblors in the 1.5 - 1.6 range, all within a 25-mile radius and concentrated on the San Jacinto fault area. No damage or injuries have been reported. (USGS)

North Dakota Power Outages

Cavalier, Mountrail and Ward counties made numerous reports of power outages due to snow and freezing rain accumulating on power lines and poles. Several power poles and lines have snapped under the strain. Currently, 1000 residents in Cavalier and Ramsey Counties are without power. In addition, one-half to two-thirds of Mountrail County residents are without power (2000 Census Population 6,631). Mountrail County estimates up to 150 poles are down with repairs and full power restoration estimated to take up to two weeks. County Commissioners are expected to sign an emergency declaration later today. There has been no request for Federal assistance at this time. (FEMA Region VIII)

Wednesday

Welcome to "Ameritina"

This morning we need to have a serious talk about denial, innuendo, and what happens to global markets next because it seems we have opened our eyes to find that suddenly we live in a frightening hybrid - a cross between Argentina and America. First the news items that we've been expecting on the oil front: Oil is well over $40 now, and it looks like there's nothing OPEC can do to slow the increases, at least in the short term: http://biz.yahoo.com/rb/040512/markets_oil_4.html

Then there's the problem with the U.S. balance of trade deficit - which is the measure of how much more we are spending than we are making.  It was up an eye-popping 9.1% and well into record territory: http://biz.yahoo.com/rb/040512/economy_3.html.  http://apnews.myway.com/article/20040512/D82H1MO00.html That gold would come back to life after being kicked around a bit shouldn't come as a surprise for you, either.  Remember, we've been telling you all along that despite the pronouncements from the Fed, we know from looking at the gas prices and the price of milk and other items that we are dangerously close to hyper-inflation.  All the nonsense about government indicators is just so much crap when you can put together a three or four-item reality check and see the truth plain as day.  Look at the price of a good steak, a gallon of milk, a gallon of gas, and a pound of butter over the last three months and you'll see what I mean - an annualized inflation rate of 30-50% - close enough to being hyper-inflation that definitions are hardly worth arguing about. Caserola - the taking it to the streets part - will come this summer as the prices explode on the upside.

Despite all the bad news, there are a few pockets of news that fit into the non-bad category.  For example, the rash of insider selling that has been running at amazingly high rates seems to have dropped: http://biz.yahoo.com/cbsm/040512/82a43393d9c74054918a8b0a5507cab6_1.html  But even here, it's not that the news has turned good - it's just that it's now non-bad.  As a warning though, you will see lots of these stories in the coming days and weeks ahead, as hundreds of wanna-be pundits try to call the bottom.  Rotsa ruck.

Two weeks ago I forecast 9,500 on the Dow by this Friday.  Ballsy call then, but it's not looking so crazy now, is it?

A Few Patriots Survive

The Patriot Act reauthorization is coming up, and to their credit, there are a few beginning to stand up for what makes America great - the Constitution: http://www.hillnews.com/news/051204/patriot.aspx  We still harbor our fears of another terrorist attack, and we expect when it happens there will be even more anti-freedom legislation introduced it it's wake in less time than credible.  The rush to take away our rights is critical to the corporatist elite.

By the way, the story refers to the actions of some "Libertarian-minded" congressmen.  If that's what it's come to - that it's Libertarian" to defend Old Glory and the Constitution, the I may have to relabel myself.  I  used to believe the Republican party was about state's rights, small central government and balanced budgets.  Oh boy, was I off on that stuff...

Weather Watch

From FEMA's daily situation report:

"Storms in the Midwest and South, snow in the West

A storm center moving through Minnesota will bring isolated severe thunderstorms to Wisconsin and south to Illinois, Iowa, Missouri and the eastern Kansas and Oklahoma. Tornado Watches have been issued along the projected path of the thunderstorms.

Winter Storm Warnings have been issued for parts of Montana, Wyoming and Idaho where scattered snow showers are expected above elevations of 3,500 feet . Some of these areas had up to eight inches of snow Tuesday.

Thunderstorms are expected along the central Gulf Coast and into the lower Mississippi Valley. A Flood Watch is in effect through Wednesday for southern Louisiana where two to four inches of rain are expected.

Monday and into Tuesday morning, pockets of urban, low-land and small stream flooding have affected 18 states, from New Mexico and Louisiana in the south to Wisconsin and Connecticut in the north, as well as Puerto Rico. As much as 10 inches of rain fell in the New Orleans area, with several homes flooded and a number of cars stranded in Slidell.

Seventeen cars of a Burlington Northern Santa Fe train were derailed Tuesday afternoon in Hartley, TX, when the train was hit by a tornado. Hartley is in the Texas panhandle. No injuries were reported. (NWS, media sources)

This is a bookmark you ought to keep on file: http://www.fema.com/emanagers/natsitup.shtm - just the thing for the next terrorist attack.

New Video Phone Issue

Here's another one of those uses for picture phones that make us wonder if it's really worth the additional cost: Students cheating on tests using state-of-the-art technology: http://www.wftv.com/education/3295729/detail.html

Tuesday

Bounce, Not Bottom

After the market's predicted decline eased this morning, a lot of folks might be tempted to say "Oh, thank Goodness, a bottom is in and we will rally from here..."  While that would be nice in storybook land, I  doubt it  will work out that way here in the Real World.  Although there is some talk that the Saudi's are calling for some oil price relief, one must bear in mind that the "House of Saud" was a Western-installed government, and it is not uncommon for them to say one thing and then do another.  Remember, most ofo the 9/11 killers came from Saudi-land.  A more measured view of what's to come on oil prices may be found in the Financial Times: http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1083180398550&p=1012571727085 the gist of which is that Indonesia is saying that high oil prices may persist over the summer.

Why might that be?  Put yourself in the shoes of an Arab oil minister for a moment.  You'd pick up the laptop and read in al Jazeera today that not only isthe U.S. Senate taking up hearings on the criminal behavior of Iraqis, but in addition, President Bush's attempts to "regain trust" are about and disconnected of mainstream moderate Arab thinking as you can get: http://english.aljazeera.net/NR/exeres/6340A43B-B200-4CA3-B5D1-391D4753D3A3.htm

""After the torture and vile acts by the American army, President Bush goes out and congratulates Rumsfeld. It's just incredible. I am in total shock," said the editor of the influential Algerian national daily al-Watan. "

Although oil is down a tad this morning, mostly on Saudi oil increase calls, which you can almost see some junior PR guy in the White House passing to a Saudi official at lunch, we see that it's starting to hit airlines such as Quantas: http://english.aljazeera.net/NR/exeres/82E86752-05CB-4A27-9A0B-2A3AF1D0774D.htm  In the American  press we read that Delta is edging toward bankruptcy, too: http://quote.bloomberg.com/apps/news?pid=71000001&refer=us&sid=aA1km2BHAzng

So with this as news background, let's put the market declines of recent days into perspective.  It's normal to have  bounce after a big decline - and given that we just burned off a few hundred points, I would expect a modest bounce of the 75-100 Dow point variety, before the markets resume the slide.  Arab influence in OPEC is considerable, and given the revelations about U.S. conduct in Iraq, there's no reason for any Arab state to cut us any slack on prices.  In fact, quite the opposite is true.  From the Arab perspective, or more rightly the Islamic perspective so as to include Indonesia, oil may be the one leash that keeps U.S. petro-colonialism under control. 

Roundup Ready Stands Down

Facing huge - and adverse - public reaction, Monsanto has shelved plans to introduce Roundup Ready GM wheat into the food chain: http://news.bbc.co.uk/1/hi/business/3702739.stm

Degree Gate

Seems that some federal officials in top management positions have been "found out" - they have degrees from unaccredited colleges: http://ap.tbo.com/ap/breaking/MGAAHIV14UD.html Of course there are two sides to this.  Some unaccredited schools really do have great reputations - and as anyone who has read Dr. John Bear's books on how to beat the high cost of education knows, accreditation really only means access to federal funds for student loans.  State licensure is an important point to study.  Then there's the matter of what you do with your degree (regardless of source) after you attain it.  Still, it's a good catch and a headline that will make headlines as it unfolds.

Old Joke Becomes Real Problem

There was a joke - way back in the 1970's - that when video phones were introduced, there would be all kinds of problems with obscene phone calls taken to the next level.  Ha, ha, ha...right?  But, here we are, 30-odd years later and guess what?  The problem is here thanks to all those phones with cameras built in: http://ap.tbo.com/ap/breaking/MGAUWUQY3UD.html  There are all kinds of calls for change, including that picture phones have a bright little strobe light that would blink obviously when the picture-taking was occurring...but you know with a tiny dot of electrical tape, that would be covered.  So, do we need to regulate this too?

Some else on Crash Watch

Steven J. Williams is brilliant - and you should immediately click over to his latest posting at http://www.geocities.com/WallStreet/Exchange/9807/Charts/SP500/Outlook.htm because his outlook for the market mirrors our own work - expecting TSTHTF (hint: something squishy/smelly hits rotating blades) in the near future:

"It appears that the bond crash scenario may still be in effect. The rally that we were looking for has occurred. The weekly chart shows the detail of the rally waves. I have interpreted these as a 5-wave corrective pattern, labeled as a-b-c-d-e. As in classic Elliott Principal fashion, after the "e" wave the chart moved sharply in the opposite direction (down).

If the bond market continues to play out as in our original discussion from last year, then bonds should continue to fall, with rising interest rates (inverse relationship to bond prices), and a break below the lower red line should at least raise the likelihood of a substantial crash scenario to another notch. Using the analogy of the security warning alerts, this should raise the warning from a yellow to orange status.

Since the Fed has already said that higher rates will eventually come - although no mention of when - we know that a break of the lower red line is inevitable... it is all a simple matter of "when". "

Our expectation, posted a week ago, is for 9,500 by this coming Friday, but if it comes a week later, it's still way better to be out a week early than 2 minutes late.  Thanks to a tipster named Al in Louisiana for sending in the news tip on this.  Let's see if 10,000 holds today...

Citi Pays Up

And pays up BIG: $2.65 billion to settle a class action lawsuit ove trading abuses: http://biz.yahoo.com/rb/040510/worldcom_citigroup_5.html

Earth Oddities: Minnesota?

This is not exactly where we would expect to read about hail, tornados and killer thunderstorm formations, but here it is in black and white: http://www.wilmingtonstar.com/apps/pbcs.dll/article?AID=/20040509/APA/405090836&cachetime=5 .  Yeah, it happens now and then, but if you look at a map ( http://www.tornadochaser.net/tornadoalley.jpg for example) you'll see this activity was off to the side of the traditional tornado alley outline.  Hmmm...

Bush in Trouble

The latest from pollster John Zogby shows John Kerry is leading George Bush in the election campaigning.  Zogby figures unless Kerry has a monumental screw-up of some kind, he's got the election in the bag.  As for Bush?  he's got problems:

"The President's problem is further compounded by the fact that he is now at the mercy of situations that are out of his control. While the economy is improving, voters historically do not look at indicators that measure trillions and billions of dollars. Instead, their focus is on hundreds and thousands of dollars. In this regard, there is less concern for increases in productivity and gross domestic product and more regard for growth in jobs and maintaining of health benefits. Just 12 years ago, the economy had begun its turnaround in the fourth quarter of 1991 and was in full recovery by spring 1992 - yet voters gave the President's father only 38% of the vote because it was all about "the economy, stupid."

The same holds true for Iraq. Will the United States actually be able to leave by June 30? Will Iraq be better off by then? Will the US be able to transfer power to a legitimate and unifying authority? Will the lives lost by the US and its allies be judged as the worth the final product? It is difficult to see how the President grabs control of this situation. "

The whole article at http://www.zogby.com/news/051004.html is worth reading because it will save you endless hours of reading campaign play-by-play and trying to sort it out.

Eisner Weighs In

I assume you have been following the debate between Michael Moore, who has recently completed a movie called Fahrenheit 9/11 that was supposedly going to be distributed by Miramax, a Disney subsidiary.  Well, today, in the NY Times, Michael Eisner defends the Disney decision to sit on the film which is critical of guess which incumbent administration: http://www.nytimes.com/2004/05/10/opinion/L10DISN.html?ei=5006&en=aa7a4a3db988e197&ex=1084852800&partner=ALTAVISTA1&pagewanted=print&position=

While we're  curious to see the film, we incredibly troubled by one sentence in Eisner's remarks that reads:

"We would hope that The Times would recognize that the Walt Disney Company has the same right of freedom of expression that it is advocating for Mr. Moore."

What's specifically bothersome is that Eisner is putting corporate rights at a level equal to human beings.  In other words, corporations have as much rights of free speech as humans.  Not to put too fine a point on it, but that kind of thinking is downright dangerous in our view.  Corporations do not - or at least should not - have the same rights as humans.   Moreover, when a corporation stifles criticism, shouldn't they have to report it as an "in kind" campaign contribution to the Bushco bid?  Wouldn't a human have to report it?

Live free or Die Bold?

Yet another computer expert has questioned whether the new electronic voting systems really work as advertised.  Look at the CNN story at http://www.cnn.com/2004/TECH/05/05/electronicvoting.ap/index.html yourself and ask "Would I trust such a system yet?"  If your answer is "No!" then you might be looking at another contested presidential election (Which Bush will win by hook or by crook, as we forecast 6-months back).

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