Urban Survival: Free Daily Economic News Update Page

If you forget to pick up punk sticks to touch off your firecrackers, use one of those incense sticks your wife keeps around the house. New Age meets reality.

UN Election Monitors

Several members of Congress are asking the U.N. to have election monitors in the U.S. this November to assure there won't be lingering questions like the last presidential contest that ended up being decided in court. STORY I'm not sure as to how this fits into the New World Order agenda, but I've made the decision to vote absentee to make damn sure there's at least some paper trail. If you're not skeptical now, go read through the excellent collection of stories and background at http://www.blackboxvoting.com/, a site which discusses "Ballot-tampering in the 21st Century" - then read the online book - and get back to me. If you're really busy, try this:

"Introduction

When we started digging around on this story, we expected to find

the odd body part or two. Little did we know, we were digging in a

graveyard. Suddenly, the dead bodies were piling up so fast that everyone

was saying “Enough, enough we can’t take any more!”

This book was originally designed to be a handy little activism tool,

an easy-to-understand introduction to the concept of electronic voting

risks. It was to contain a history, interviews, and a discussion of theoretical

vote-rigging. But as we were plugging along, researching the

subject, it got a little too real — even for us.

C’mon over. No time to waste. We have a democracy to defend.

Bev Harris

David Allen" http://www.blackboxvoting.com/

Speaking of which, why don't you take a few minutes over this weekend and actually read the Constitution of this great country at http://www.house.gov/Constitution/Constitution.html . It will give you some understanding of why it's OK to dislike the sitting president and his policies but be completely supportive of the Presidency.

Moreover, when I take issue with things (like detaining terrorist suspects without trial) you'll find Constitutional safeguards like "No Bill of Attainder or ex post facto Law will be passed." - meaning no one gets singled out and denied due process: http://www.techlawjournal.com/glossary/legal/attainder.htm It's one of the cornerstones of Freedom - along with another cornerstone, the Bill of Rights.

By the way, the "security checkpoint" edition of the Bill of Rights is available if you travel a lot - printed on pieces of metal: http://www.securityedition.com/ From that site: "You need to get used to offering up the Bill of Rights for inspection and government workers need to get used to deciding if you'll be allowed to keep the Bill of Rights with you when you travel." Your papers, please?

And from a reader:

George:

Thanks for posting a link to the Bill of rights that includes the Preamble to the original Bill, which states that these are further "Declaratory and Restrictive Clauses." Never forget to mention that the Constitution written by the founders points out that Governments, Groups, communities, and Collectives only have Powers. Only Individuals have Rights. The point of the Constitution is that the powers of the many may not infringe on the rights of the one.

As a conundrum to my friends on the left and the right I point out that while I am personally pro-life, the reason I am so against Roe-Vs. Wade has nothing to do with the life issue but with the way the Courts decided it without reaffirming the Ninth ands Tenth Amendments, which all present-day Legal "scholars" say are dead now anyway. To reaffirm them gets away from the idea that the government has rights!

If the Court had said simply that the right to Choose was in the unremunerated right in the Ninth Amendment, then so-be-it. If on the other hand the Congress then asserted the Article III Section 2 Clause 2 and declared that the subject was not in the jurisdiction of the Federal courts, and was left solely to the States, then the Red states would probably outlaw it anyway, and so be that, too. The Same Article, Section 2 Clause 1 makes it plain the Federal Courts are of Limited Jurisdiction, and the State Courts were the courts of unlimited Jurisdiction.

All of this would be fine with me because It Leaves Intact The Only Political Document In the History Of Mankind that states the Individual Is the Supreme Ruler of his Own Person. Even the Magna Charta only applied to Peerage, and left the serfs as chattel. And That Is above everything!

Happy Fourth!

Inside Report

This week we review Economic Liberty. It's not a pretty sight - and miles from what the Founding Fathers had in mind. Speaking of which, you might be interested to see how Inside Report subscribers rate our efforts:

We also polled subscribers on just how ready they were for any disruption of life that might come along due to terrorist attacks, climate change, martial law - or whatever. Very interesting chart:

A few folks have asked for updated information about what's covered, so here's the list of this year's reports to date:

07/04/2004 Economic Liberty: A review of what's not free any more.

06/27/2004 Consumer Saturation Revisited: If we're in a recovery, what are advertising revenues and costs doing?

06/21/2004 Wind Corrected Speed Limits - Sure Iran's a problem, but here's a real solution to energy demand!

06/12/2004 What Can You Save: After a Midsummer's nightmare, what will be left worth buying?

06/06/2004 Don't sweat the Meteors, we have bigger problems

05/30/2004 China, Oil, and May 22nd: Why you need to read Huberman, Youssefmir, and Hogg's work

05/23/2004 The "Walk Away" Option - What keeps city dwellers frozen in place?

O5/16/2004 When Johnny Comes Marching Home

05/09/2004 Tribes and Affinity Groups: Welcome to Life after $40 Oil

05/02/2004 Odds for Two Clients: How we apply SDLC principles to business model success probabilities.

04/25/2004 September's Crash: Some Web bots, some energy conservation, and some breathing time?

04/17/2004 Living with the trends that lead to our future.

04/11/2004 Economic Implications of Global Carrying Capacity

04/04/2004 Gauging the next Terrorist Induced Market Drop (with spreadsheet)

03/28/2004 Welcome to the land of $5 gas - and how we might bring it on ourselves

03/21/2004 Crude Implications: Where oil is going is up, and that means down for the economy

03/14/2004 Patents and Prophesy: Dow 700?

03/11/2004 Special preopening chart of Global Index showing breakdown of trend.

03/07/2004 What's a vacation? Some thoughts on those leisurely summers of the past

02/29/2004 Urgency to plant a garden? This year, with weather refugees, it makes sense

02/22/2004 Three Plagues: Energy, Jobjacking, and Debt.

02/14/2004 Past, Present, and Future: Reflections at 55

02/08/2004 Thank Robotics for redeveloping barter systems.

02/01/2004 Two Sure-fire Killer Investments. OK, so it's insulation and homegrown veggies...

01/25/2004 Could we have an Election Year Crash? Kerry and Bush are "safe" choices...

01/18/2004 Economic Patriotism: It's not only jobjacking, it's importing cheap workers, too!

01/11/2004 Catastrophic Possibilities: Will the administration be overwhelmed by events?

01/03/2004 From the Euro perspective, the US Market was up only 1.9% for all of 2003..

Inside Report is only $30 a year - more Subscription info here.

West Coast Quake Jitters

We got to reading a couple of headlines from earlier this week and it reminded us of the recent TV movie about a north-south fault which destroys the West Coast. It occurred to us that the Alaskan earthquakes and the ones off Costa Rica when coupled with the report of a mile-long crack in the earth in Mexico could be construed as just the kind of setup that would be a prelude to the real life version of the movie. Now let's sprinkle in a few factoids that have percolated up:

Monday's quake in Illinois (of all places!) http://clifty.com/hazard/archives/1040628-090852.html
Active watches are ongoing at the Mount Veniaminof, and Shishaldin volcanoes in Alaska: http://www.volcano.si.edu/gvp/reports/notices/gvn00086.htm with follow-up on Friday at http://www.volcano.si.edu/gvp/reports/notices/gvn00093.htm
There have been large numbers of landslides around the world - not specifically quakes, but certainly earth movement that has caught the attention of USGS: http://landslides.usgs.gov/html_files/landslides/newsinfo.html
We've seen micro-quake activity in the Corona/Riverside/Yorba Linda/Chino area this week - again something that is being taken quiet seriously: http://www.data.scec.org/recenteqs/Quakes/ci10023817.htm
Almost "normal" small shaking continues around San Jose: http://quake.wr.usgs.gov/recenteqs/Quakes/nc40158402.htm
Not normal - and raised to Orange alert status on the Sheveluch and Karymsky volcanoes on Russian Kamchatka Peninsula where the Bezymianny and Klyuchevskoy volcanoes are now showing Yellow alert levels. http://volcanoes.usgs.gov/update.html
International discussion on the Internet has picked up this week with more discussions like the one at http://quake.exit.com/A040701.html on the existence of "earthquake clouds" as precursors to major events.

We've started watching the quake situation a lot more closely since a quake of 6 + on the Richter scale could have large economic consequences, depending on length of the shaker and so forth. We know that at least one California predictor has put down a 5.0 by September 5 - and this is the same fellow who predicted the 8.1 quake in Hokkaido Japan in September 2003.

Oil Patch Wars

We don't normally find so much to report on a single topic, especially on a holiday weekend. However, these are exceptional times as what we think historians will call the "Manufacturer's Resource Wars" are well underway. Take for example these stories:

The BBC is reporting that Russian police are raiding the headquarters of the oil giant Yukos. http://news.bbc.co.uk/1/hi/business/3862937.stm Recall that Yukos just recently lost a huge tax battle with the (Putin) government which resulted in a $3.4 billion bill for back taxes http://news.bbc.co.uk/1/hi/business/3854077.stm What effect the company going bankrupt will have is not clear, although we could reasonably expect at least a few of the seven sisters to be circling like so many vultures.
U.S. troops raided an Iraqi bomb factory today: http://news.bbc.co.uk/1/hi/world/middle_east/3862435.stm
Oil refineries on Puget Sound have been told to be on alert over the holiday: http://www.komotv.com/news/story_m.asp?ID=32006 although we note that the Department of Homeland Security has not yet raised the threat level to Orange, as we've predicted, we expect similar warnings will have been issues for the Texas Gulf Coast sites as well.
Fox began reporting Friday that Saudi oil infrastructure, namely pipelines, might be next on the militant Islamist's hit list: http://www.foxnews.com/story/0,2933,124188,00.html

All told, there's a lot of movement, most of it ominous in tone.

Friday

9.8% - Shocker Jobs Report

Huff and puff about the recovery as much as they want, but the jobs report just out says:

   Nonfarm payroll employment continued to rise in June, and the unemploy-

ment rate remained at 5.6 percent, the Bureau of Labor Statistics of the U.S.

Department of Labor reported today.  Payroll employment increased by 112,000

in June, following larger gains in the prior 3 months.

Unemployment (Household Survey Data)

   The number of unemployed persons, 8.2 million, was essentially unchanged

in June, and the unemployment rate held steady at 5.6 percent.  The unemploy-

ment rate has been 5.6 percent in all but one month this year.  The unemploy-

ment rates for the major worker groups--adult men (5.0 percent), adult women

(5.0 percent), teenagers (16.8 percent), whites (5.0 percent), blacks (10.1

percent), and Hispanics or Latinos (6.7 percent)--showed little or no change

over the month.  In June, the unemployment rate for Asians was 5.0 percent,

not seasonally adjusted.  (See tables A-1, A-2, and A-3.)

Total Employment and the Labor Force (Household Survey Data)

   Total employment was 139.0 million in June, and the employment-population

ratio--the proportion of the population age 16 and over with jobs--was about

unchanged at 62.3 percent.  The civilian labor force participation rate also

was little changed at 66.0 percent.  (See table A-1.)

Persons Not in the Labor Force (Household Survey Data)

   The number of persons who were marginally attached to the labor force was

1.5 million in June, about the same as a year earlier.  (Data are not season-

ally adjusted.)  These individuals wanted and were available to work and had

looked for a job sometime in the prior 12 months.  They were not counted as

unemployed, however, because they did not actively search for work in the 4

weeks preceding the survey.  There were 478,000 discouraged workers in June,

the same as a year earlier.  Discouraged workers, a subset of the marginally

attached, were not currently looking for work specifically because they be-

lieved no jobs were available for them.  The other 1.0 million marginally at-

tached had not searched for work for reasons such as school or family respon-

sibilities.  (See table A-13.)

Industry Payroll Employment (Establishment Survey Data)

   Total nonfarm payroll employment increased by 112,000 in June to 131.3

million, seasonally adjusted, following larger gains in the prior 3 months.

Since August 2003, payroll employment has risen by 1.5 million.  In June,

there were job gains in health care and social assistance, professional and

technical services, and transportation and warehousing.  Manufacturing employ-

ment edged lower following several months of small increases, and construc-

tion employment was flat.

Other highlights:

The workweek in manufacturing fell by 0.3 hour to 40.8 hours, nearly offsetting the gain in May.
In June, durable goods employment was little changed, while the number of jobs in nondurable goods continued to trend down.
Over the year, average hourly earnings grew by 2.0 percent, and average week-
ly earnings increased by 1.7 percent. (This doesn't of course keep up with inflation which means the standard living continues to tank - G...)
Oh, and if that's not enough, some of the earlier hyped data was toned down...

But the real story is in the Table A-12 data: It shows that "Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers increase by half a percent from 9.3% to 9.8% in June! http://www.bls.gov/news.release/empsit.t12.htm. Immediately after release, the price of gold spiked more than $4 but has since pulled back a bit. And yes, we don't think the market will take the news well at all.

We continue to be impressed with the viewpoint of Comstock Partners. Assessing the Fed rate hike this week, but in advance of the jobs release this morning, Comstock said that it is, in effect, skeptical of the "recovery" - as we have consistently expressed here. http://www.comstockfunds.com/screenprint.cfm?newsletterid=1112 Nice to see a large fund group telling it like it is...

Mid East Round Up

But it's not al Qaida being hung with the damage - it's Kurdish separatists. http://news.bbc.co.uk/1/hi/world/default.stm. Besides the five dead from the bombing, there was an earthquake in Northeast Turkey that has killed at least 18: http://english.aljazeera.net/NR/exeres/55C84DC7-EB57-4092-8745-0E768D7AFF28.htm Also in that part of the world, the Jordanians reportedly are planning to offer troops to Iraq's U.S. appointed government - which means we no doubt laid out some heavy promises of support for Jordan to get them to ante up troops. At the "trial" of Saddam Hussein, some speculation that the whole idea of a public trial may backfire: http://news.bbc.co.uk/1/hi/world/middle_east/3858539.stm Behind all the news, www.ino.com posts crude this morning at 38.74 and we'd bet on over $39 before the day is out.

California Fear Point:

A mile-long crevasse opened up early Tuesday morning near Guadalajara and it resulted in the death of one fireman. http://www.signonsandiego.com/news/mexico/20040630-2044-mexico-crevasse.html - Massively missed story by the mainstream press because whenever you get this kind of earth movement, you have to look up and down from the fault and wonder what earthquakes will be unleashed by this latest earth movement?

Day of Rest

The state of Virginia has a problem with blue laws - specifically the one that says all workers in the state get to take Saturday or Sunday off for religious observances. You can see the problem here - no one to staff over weekends: http://www.wric.com/Global/story.asp?S=1982686&nav=0RcxOLOL. Failure to go along with the day off law click worker pay to triple overtime. Doesn't sound like a bad deal from the worker perspective - but I guess that's why business is screaming.

Head's Up

There's a 930,000 year old skull that's causing some problems for the conventional archeologists of the world: http://www.newscientist.com/news/news.jsp?id=ns99996106

Fourth of July Safety

Have a great time this weekend, but be sure and check the Department of Homeland Security where we would not be surprised to see an increase in the alert level over the weekend as a "butt covering" move. Already the FBI is calling for extra vigilance, http://ap.tbo.com/ap/breaking/MGBAOG896WD.html but what I'd expect to see is an increase to Orange on Saturday and then quickly dropping back to yellow if nothing happens. By raising it to orange for a few hours over the weekend, they'd be able to say "See, we raised it..." and thus maintain some credibility. Just a guess, but you know how bureaucracies work.

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Thursday

About those Navy Ships

Dress rehearsal time for beating China back from Taiwan? Well, all those naval movements we reported on several weeks back are now showing results: A monster military exercise off Taiwan and within striking distance of China: http://straitstimes.asia1.com.sg/topstories/story/0,4386,259015,00.html. Of course there are also lots of ships on the other side of the world steaming toward the Middle East in general, and we speculate Iran in particular.

Bush the Criminal - Saddam

What did you expect Saddam to say when he was hauled into a Bushco appointed government's "court"? http://news.bbc.co.uk/1/hi/world/middle_east/3855359.stm You didn't really expect him to go along with the trial, did you? Of course he will follow the standard military approach: Say nothing or deny everything and make counter-accusations. Defiant Saddam appears in Iraqi court

Not to be missed is the General Accounting Office's report that says basically that with few exceptions the people of Iraq are worse off now than they were before the war. You can read the whole document at http://www.gao.gov/new.items/d04902r.pdf but you better pop some No-Doz first: It's 105 pages. Some of the parts that are not being covered by the administration's well-heeled media buddies:

"The security situation in Iraq has deteriorated since June 2003, with significant increases

in attacks against the coalition and coalition partners. Anti-coalition attacks have

generally become more sophisticated, widespread, and effective. In May 2004, the

Secretary of Defense and the Commander of the U.S. Central Command projected that

the level of violence could continue to increase as Iraq moves to elect a transitional

government. The increase in attacks has had a negative impact on military operations

and the work of international civilian organizations in Iraq. The United States decided to

maintain a force level of about 138,000 troops at least until the end of 2005, rather than

drawing down to 105,000 troops by May 2004, as DOD had announced in late 2003. The

United Nations, numerous nongovernmental organizations, and a range of civilian

contractors have reduced their presence or completely shut down operations. As part of

the effort to provide stability, the coalition plans to transfer security responsibilities from

the multinational force to Iraqi security forces and to dissolve Iraqi militias operating

outside the central government’s control. As of June 2004, Iraq had security forces

numbering about 220,000, including the Iraqi Police, Iraqi Civil Defense Corps, and Iraqi

Armed Forces. During the escalation of violence that occurred during April 2004, these

security forces collapsed in several locations. As of June 2004, efforts to disband Iraq’s

militias have produced formal agreements between the CPA and nine major political

parties that possess militias. However, key elements of the CPA’s transition and

reintegration process remain to be finalized." - GAO Report.

Nine political parties with guns and troops?. Ouch.

302.22 Points from Believing

On February 11th, the Dow closed at 10,737.7 after trading as high as 10,779.40 intraday. (Link) The Dow closed yesterday at 10,435.48 http://finance.yahoo.com/q/hp?s=^DJI That's 343.92 points from a breakout to new highs for the year. On a closing basis, between February 11th and now, the lowest close was 9,937.71. So from the high, the market dropped (on a closing basis) 799.99 points which is close enough to 800 points for us. Now suppose for a minute that you're a Fibonacci trader. What would you be looking for in here? The answer is that you'd take the size of the decline, 800 points, and multiply that times the "Golden Ratio 0.618" and get 494.4. You'd add this to the closing low (9,937.71) to arrive at a Fibo level of 10,432.11, which as luck would have it is within a couple of points of where the Dow closed yesterday. But the Dow closed at 10,479 on June 23rd, so the Fibo purists are probably now looking at the Elliottist's 75% retracement (or 80%). Me? I'll hold out for a close over the old high of 10,737 before I even think about this market going on to new highs.

Tomorrow, the jobs report will come out - and if you believe it, the recovery will be shown to be underway. Latest weekly figures at http://ap.tbo.com/ap/breaking/MGB1QZ2V4WD.html but we'll be watching for the alternative measures of labor underutilization before getting too excited about "recovery". By the Labor Department's own figures, unemployment has only dropped by about 17,000 since the middle of April last year - and that's not counting people who are no longer counted because their benefits have run out... Want to place bets on how slow the Produce Price Index numbers will be this month? Maybe start a pool at work?

Buying the President

The corporate interests that have pumped more than $200-million toward George 43 have also now helped John Kerry raise $175-million. See headline at www.drudgereport.com But the IDB story at (link) has us wondering if Vice President Hillary would cause us to vote Bush again.

Hey! Here's a great idea: What if big corporation which are buying the presidency said "We'll give money to neither candidate and in fact we'll give up our wasteful political bribery donations. Instead, we'll funnel that $300+ million to shareholders or we'll invest in tangible assets - like new plants and equipment or we will lower prices or hire more employees..." I know it'll never happen but wouldn't it be great if....

OK, the alternative: Outlaw giving of money to BOTH SIDES. Ban stupid contributions to both sides and force PAC's to disclose which single candidate they're trying to buy.

Outing Anonymous

Editor and Publisher has revealed the name of the CIA intelligence analyst who authored "Imperial Hubris: Why the West is Losing the War on Terror.

http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1000557752

Sun Oddity Update

The images from NASA's LASCO C-2 look a lot more like a normal solar flare in today's pictures over at

http://sohowww.nascom.nasa.gov/data/realtime/realtime-c2.html

Solar Power Shift

Wired's John Gartner has a great story today about how Europe is now gobbling up solar panels faster than the US and supplies are tightening up: http://www.wired.com/news/technology/0,1282,64052,00.html?tw=wn_tophead_1 California, New Jersey, and Maryland are all actively promoting solar installations.

YBTV

Very interesting story about a 12-mile stretch along Range Creek in Utah where apparently there are large numbers of undisturbed ancient dwellings, some dating back 4,500 years: http://www.dhonline.com/articles/2004/06/25/news/nation/nation08.txt

Speaking of which, I have been looking at the various calendars and have come up with a what may be the politically correct way to reconcile the Jewish, Muslim, Georgian, Gregorian, and all other calendars. I'm proposing we settle on a date that television was invented and mark everything from there. Because television is ubiquitous, so we could pick some arbitrary date (Like Louis Parker's 1948 patent issue date) and date everything from there. This system would base everything on years before TV (YBTV) or simply B) and years after television (YATV) or simply A for dates after September 7, 1948. Think how politically correct we could all be!

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Wednesday

Fed Reaction: "Transitory" means "Oil"

A couple of readers have written in to ask my reaction to the Federal Reserve raising rates by 1/4% to 1.25%. Well, I don't have much of a reaction because I think I have a very good handle on their use of the words "transitory" as it relates to inflation. Let me tell you what is "transitory": Oil prices. Without the recent small decline in oil prices from $41 or so to the present $36.50 range (crude ex NYC) then we would have 1.5%. I don't think they are watching Malaysian T-shirt prices, right?

Now, the gamble for the balance of the summer is what will happen to oil prices which will in turn tell us if August is 0.25% or 0.50%? Clearly the oil driven inflation pressures are in the pipeline now, and that they will show up between now and August is a good bet. So when the Fed uses language like "transitory" read it as "We lucked out on oil prices, otherwise we would be raising a half and that would kill housing." Their use of the word "measured" means "We might have to raise in the future anyway" while the word "balanced" means we're guessing. So there you have a reaction - boiled down it's "Saved by Oil but watch the GSE's." As go oil prices, so will go rates.

Special Sun Oddity Update

What the heck is this ball at about the 10 o'clock position relative to the sun which looks almost like a star trying to peer out from behind the sun? It's one of the strangest looking sunspots / flares I've ever seen - if that's what it is! I will keep the original on file and upload it without modification if NASA takes down the link. If that happens, worry.

For the latest - And look at all the CCD Bakeouts shown - check the image updates at http://sohowww.nascom.nasa.gov/data/realtime/!

Fed Surprise?

It takes little more than a room temperature IQ to expect the Fed to raise rates by exactly a quarter point today. No doubt Fannie and Freddie are nervous because the number of none-performing real estate loans they have will launch skyward with anything more than a quarter point. Freddie earnings are down by more than have compared with last year: http://ap.tbo.com/ap/breaking/MGB74TEF3WD.html But more important would be the no raise possibility. That's the one that scares me the most because it would signal that the recovery is not yet going well enough to start moving rates up. Almost equally as worrisome is the small - but real chance - that the rates will go up a half a percent. That too would be a disaster. Not only for Freddie and Fannie but it would signify that the 21.9% PPI Crude Goods number has caught the Fed's eye as it caught mine and they will need to get ahead of the curve. Normally I would not worry so much about the Fed doing something out of the telegraphed signal's range (1/4 pt) except that they banged on gold yesterday to take it down such that event with the little bump up in the early trade today it's running about $393. The only thing that would explain hammering gold would be a Fed Surprise because the kind of money spent hammering gold is way out of what the expected returns would be if a surprise is not forthcoming, unless it's the PTB taking no chances with the fragile chances of Bush to get re-appointed by a court..

Iran on the Brink - Brit Paper

Remember those British patrol boats that were taken last week? The UK paper The Telegraph has reported today that the US military commander ordered British forces to take back disputed territory grabbed by the Iranians. But the British got the job done with diplomatic efforts not gun slinging. The STORY is a "must read" because it shows with no doubt how the neocons deep in the Bush administration are still running their agenda - which is to pick wars with whoever has oil in order to assure the delay for as long as possible, the realization by investors that Peak Oil is here. We also mentioned that the Individual Ready Reserve was being called up - and now it's a big headline with the catch up media: http://apnews.myway.com/article/20040630/D83H09000.html If the US were to invade another country today, such as Iran, it would be a perfect "cover op" for a rate hike pass by the Fed because it would prick the housing bubble. The Telegraph story shows that's what was tried.

Book Review

Imperial Hubris: Why the West is Losing the War on Terror is apparently a good read of why an intelligence analyst ("Anonymous") is so outraged at what's going on in the Middle East: http://www.commondreams.org/cgi-bin/print.cgi?file=/views04/0629-08.htm

Never Save Passwords

The virus running around the net trying to steal personal banking information is a nightmare STORY but only if you save account logons and passwords on your computer. While I appreciate Gates and company was trying to make it convenient to have Windows remember logon information, it makes your computer a veritable treasure trove waiting to be attacked. We have always declined the Windows prompts to "Remember logon on this computer?" prompts in order to maintain what little there is left of confidentiality in the digital world. Think about this: Anyone who steals a computer (or attacks it online) might get all of your personal information - and I don't think you want that. I also use the Internet activity LOCK feature of my firewall (Zone Alarm Pro) whenever I'm away from the computer for a while. Being paranoid is a good thing because they are out to get you on this one.

Limiting press Coverage

Al Jazeera reports that its operations in Algeria have been frozen: http://english.aljazeera.net/NR/exeres/4513DF99-BE43-46F7-B42B-57FAD2EA156F.htm We continue to find al Jazeera a good look into the Arab world's thinking with about as much bias toward the Arab viewpoint as the corporate apologists' media of our country have toward the neocon agenda.

Houston Drowning

Although we're something like 150 miles from Houston, the rain gauge on the north fence shows that we're something like 8 inches ahead of where rainfall should be for this time of year. My measurements are not exactly scientific, as I have no idea how much a dead wasp in the rain gauge throws off a measurement. But the scientific read is that we are only 6" ahead of schedule. What's mind boggling though it what is going on at Houston down the road. Precip there is an AMAZING 44.87" of rain Year-to-date versus an average at this point of 23.98" http://www.wunderground.com/US/TX/KHOU.html?almanac=1 That's a whopping 20 inches of rain more than normal. Tell that to the flush-misers of Colorado! Looks like my guess that this part of Texas would turn tropical with global warming was a damn lucky guess!

Tropical Diseases

Dengue fever is spreading in Vietnam: http://www.promedmail.org/pls/askus/f?p=2400:1000 and follow the links. And thanks to newsboy for the tip on the site which will be added to our links & sources page.

A Rare Company

OK, when I found that my new diesel generator wouldn't arrive till around July 10th, I was not pleased. But I was impressed when the folks at www.ramcopower.com sent me a nice fluorescent lantern as a "thank you for your patience" gift. Wow! What a company, huh? Not many like that around.

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Tuesday

Fed Watch

As we contemplate the immediate financial future, it's interesting to look at the swirling of news stories that accompanies the Fed meeting. There was one story with the link no longer working that told how corporate profits were booming up something like 25% in the past year. But there are also stories about how times are getting tougher in the banking industry with standout companies like Washington Mutual slashing their forecasts: http://money.cnn.com/2004/06/28/news/fortune500/wash_mutual.reut/index.htm. While we don't have any inside knowledge about what will happen to the markets today, we are pleased to see that John Crudele of the New York Post has the same concerns we've voiced many times about the odd behavior of the Produce Price Index. http://www.nypost.com/business/26522.htm.

In our latest edition of Inside Report, we looked at the PPI numbers and presented a chart that pretty clearly demonstrates the problem faced by the Fed this week. (Excuse the lower quality graphics here on the free side).

What this shows is that if you look at the headlines, you might think that the Produce Prices are under control. But are they? Remember that the "under control" number is jumping ahead at an annual rate north of 5.5% (blue bars in the foreground). But when you go back up the food chain a bit, you will see that intermediate goods (burgundy color) are going up even faster, and those beige bars are a disaster because they show inflation of crude goods at 21.9% annualized.

This doesn't necessarily mean that the Fed will raise rates half a percent this time - and with the election coming closer every day, it would make sense for the Fed to raise 4 quarter point moves on a monthly basis - saving the half percent for after the election.

But knowing that Crude Goods are popping up at a 21.9% annual rate, which the financial press doesn't bother with because it was buried in Table B of the press release, we need to be mindful that some Crude Goods work through the system in as little as 90-days. Other crude goods take up to 5-years to work their damage all the way through the system - like petroleum products, for instance.

But event with petrochemicals, we're seeing the leading edge of inflation with the forecasts of nature gas price increases for this fall. In Oregon, consumers are being softened up for 12-17% increases in gas prices. http://www.bendbulletin.com/news/story.cfm?story_no=13795 We'll get our propane tank at the ranch topped off well in advance, perhaps as soon as mid July.

No Peace in Iraq

The fact of the handover of Iraq a couple of days early didn't result in a stunning rally by the markets yesterday - as we predicted - but there was sure a lot of hype and hubris in the early going when things were up nearly 80 points. Still, by the end of the session, the markets had returned to rational thinking and concluded that there would probably be more violence in Iraq regardless of the paper trail. Sure enough, violence continues: http://english.aljazeera.net/NR/exeres/504C098C-8AB5-4547-B9B2-EE76A34815E4.htm .

What's of greater concern than Saddam Hussein's future, as he's to be handed over to Iraqi appointees tomorrow for "trial" is the report from Matt Drudge today that the U.S. is getting ready to call up Individual Ready Reserve forces: http://www.drudgereport.com/flash2.htm This is worrisome because it means that the military is still pumping up manpower, which is not the picture being sold to the voters. Good story in Military.com at http://www.military.com/NewsContent/0,13319,FL_demand_062904,00.html?ESRC=eb.nl that puts the stress on the National Guard into perspective.

Remember what the web bot runs described as a new entity; it was described as "cognitive dissonance" and it's what goes on in people's heads when there's "news" of a handover and yet at the same time more troops are being readied and the draft is quickly working its way through Washington. The fear that some false-flag terrorist op will happen before the election and save the Republican's chances is being openly discussed on message board due in part to the latest polls which show Bush is sinking in the ratings and needs something to bail him out: http://www.iht.com/articles/527088.html. As we have mentioned before, a terrorist attack about now would also give the Fed an excuse to hold rates low for another month or two which would help the economic recovery, fragile as it is, while being able to blame market reactions on "terrorists". I always worry when the interests of "big money" and government would be served by something bad. God willing, my fears will be unfounded.

NEO: Saturn

Today's Non-Earth-Oddity is the rotation of Saturn. The story at http://biz.yahoo.com/ap/040628/saturn_cassini_1.html reveals that Saturn's rotation has slowed by six minutes in 23 years. Why does that matter? Well, there are two possible reasons for the change in rotation. If it's the speculated change in coupling between the crust of the planet and the molten core, then it's a "Who cares?" On the other hand, if it is something impacting other planets, then we maybe ought to pay a hell of a lot of attention to global climate issues quickly. Remember the ice cap of Mars is gone and if you connect the dots in the right way, you could argue that something is affecting the whole solar system, not just Saturn,

EO's

With a couple of asteroid fly-bys it looks like there may be a connection to earthquakes. If you have been watching the uncensored Red Puma EQ monitor, http://www.seismo.ethz.ch/redpuma/redpuma_ami_list.html you would have noted in addition to the Alaska quake, there was a 6.1 off the coast of Costa Rica.

If this isn't taking you to the fringes of science fast enough, you might have spotted the crawler on CNN this morning that a crop circle has been spotted today in Utah, and while there are no pictures available yet that we're aware of, this will likely change in the next day or two. In the meantime, the crop circle season is underway elsewhere with the most recent one in England at http://cropcircleconnector.com/2004/milkhill/milkhill2004a.html (slow loading due to graphics).

Hangover Relief?

Last, but not least, we are thrilled that the prickly pear cactus up on the north side of the ranch may have some very good uses (other than making the tire store in town rich from fixing flats on the tractors). The BBC reports that a prickly pear cactus extract may help relieve hangovers: http://news.bbc.co.uk/1/hi/health/3846957.stm The news about the hangover cure is not nearly so interesting as finding out how I can sign up to be a volunteer for this kind of medical experiment?

The Handover

No question about it, a good strategic move, handing over Iraq a couple of days ahead of schedule - no doubt to throw off any plans of resistance: http://www.sky.com/skynews/article/0,,30000-1140761,00.html However, we don't expect much - if any - market reaction to the news as it's already well discounted by the bourses. Gold on the other hand is going up - along with silver - which means to us that Iran (one of the Axis of Evil members if we recall right) will be next. Will the "transfer of power" change anything? No anything in the Arab minds http://english.aljazeera.net/NR/exeres/B4AEEF06-843A-4C38-BAF8-7570747B34A0.htm certainly.

Meantime, not making headlines - yet - is the allegation that the Coalition Provisional Authority can't account for $20 billion of cash generated by sale of Iraqi oil and other resources. This one has not been discounted by the markets yet: http://news.bbc.co.uk/1/hi/uk/3844425.stm. We find cruel irony in the folks being asked the tough questions about the missing accounts having the initials C.P.A.

In Ankara, Turkey the NATO leaders meet today and tomorrow under the continuing worry about chemical and biological weapons being used: http://www.debka.com/article.php?aid=868 although you might want to take Debka's description of al Qaida in Iraq with a grain or two of salt.. The anti-NATO demonstrations aren't getting much play here, but they are big news in the Arab world: http://english.aljazeera.net/NR/exeres/C9F93B7D-C702-4200-A17B-00CCCBBCB81E.htm

Overall, with the U.S. Fed meeting nearly at hand, we would expect to see the terror threat level elevated to Orange this week and with that - the possibility of a false flag "terrorist attack" in order to give the Fed an exogenous event to hide behind when the market declines following the pending rate hike. A BIG attack would give the Fed a reason to stand pat on rates and stave off the day of reckoning for Freddie and Fannie. That's not conspiracy theory, just a note on how events could fall.

If you want some real conspiracy stuff, go check the interview over at

http://www.financialsense.com/Experts/2004/AustinFitts.html (link updated) and read up on how the off budget expenditures can be used to diddle the markets. A worthy snippet:

"CA: Right. I think the hardest thing about being an investor today is how do you get accurate information about the real values how do you understand what Fannie Mae or Freddie Mac's portfolio is really worth? How do you trust the books? And it's unnerving because the market you know, part of the thing that's keeping the stock prices where they are from what I see is tremendous manipulation within the markets. So we're looking at and tracking a political economy, not something that behaves according to traditional economics. Because you're not looking at honest books, and you're dealing in a situation where you know, if in 1 year the Federal Government is missing $2.3 trillion, where does that money go, and where is it being reinvested? That's a huge cash flow that can take the markets one way or another. "

This from one of the Bush 41 insiders...Catherine Austin Fitts http://www.solari.com/about/index.htm . Worthwhile reading. Also, I understand she will be on Alex Merklinger's Mysteries of the Mind show tonight... http://www.solariactionnetwork.com/phpBB2/viewtopic.php?t=1142

Confused Dow Theorists

There's a good read this morning from Yahoo about how the Dow Theory says the market shouldn't have dropped 73 points Friday: http://biz.yahoo.com/cbsm/040628/f4654293a4224cd4a8dcab686d6330da_1.html Our take on Dow Theory is that it's one of those indicators that is always 100% right when viewed in the read view mirror - and only one of a few dozen signals we base trades on while in the market, which I'd hasten to point out we have been out of for many months. Part of the reason, as we described to Inside Report subscribers this weekend is that the Crude Goods portion of the Produce Price Index is heading north at a just under a 22% annual inflation rate. Repeat after me: Weimar Republic

One of the cornerstones of Dow Theory is that the Transports confirm the Dow trend. Yet while the transportation index is up, we notice that Japanese auto production is dropping: http://ap.tbo.com/ap/breaking/MGBIVLAJ0WD.html. The real deal on the transports is simple: The modest recovery of airline stocks is probably what's driving it. The indoo's are likely the right reading (bearish) while the transpo's are the fluke, at least in our mind.

EO's

Earth Oddities: Quake of 4.7 in Illinois:

A magnitude 4.5 earthquake IN ILLINOIS has occurred at:
41.44N  88.95W  Depth   5km  Mon Jun 28 06:10:51 2004 UTC

Time: Universal Time         (UTC) Mon Jun 28 06:10:51 2004
      Time Near Epicenter          Mon Jun 28 01:10:51 2004
      Eastern Daylight Time  (EDT) Mon Jun 28 02:10:51 2004
      Central Daylight Time  (CDT) Mon Jun 28 01:10:51 2004
      Mountain Daylight Time (MDT) Mon Jun 28 00:10:51 2004
      Pacific Daylight Time  (PDT) Sun Jun 27 23:10:51 2004
      Alaska Daylight Time   (ADT) Sun Jun 27 22:10:51 2004
      Hawaii Standard Time   (HST) Sun Jun 27 20:10:51 2004

Location with respect to nearby cities:
     15 km (10 miles) NW of Ottawa, Illinois (pop 18,000)
     65 km (40 miles) SE of Dixon, Illinois (pop 15,000)
     120 km (75 miles) WSW of Chicago, Illinois (pop 2,896,000)
     190 km (120 miles) NNE of SPRINGFIELD, Illinois

A 6.7 shaker in Alaska:

A magnitude 6.7 earthquake IN SOUTHEASTERN ALASKA has occurred 
at: 55.02N 134.36W  Depth  19km  Mon Jun 28 09:49:48 2004 UTC

Time: Universal Time         (UTC) Mon Jun 28 09:49:48 2004
      Time Near Epicenter          Mon Jun 28 01:49:48 2004
      Eastern Daylight Time  (EDT) Mon Jun 28 05:49:48 2004
      Central Daylight Time  (CDT) Mon Jun 28 04:49:48 2004
      Mountain Daylight Time (MDT) Mon Jun 28 03:49:48 2004
      Pacific Daylight Time  (PDT) Mon Jun 28 02:49:48 2004
      Alaska Daylight Time   (ADT) Mon Jun 28 01:49:48 2004
      Hawaii Standard Time   (HST) Sun Jun 27 23:49:48 2004

Location with respect to nearby cities:
     90 km (55 miles) WSW of Craig, Alaska (pop 1,300)
     175 km (110 miles) W of Ketchikan, Alaska
     365 km (225 miles) S of JUNEAU, Alaska
     1005 km (620 miles) NW of Vancouver, British Columbia, Canada

And thousands of lightning strikes hit the western portion of Canada over the weekend
http://cnews.canoe.ca/CNEWS/Canada/2004/06/26/515802-cp.html

IBM Does Web Bots?

Here's the link - sounds sort of familiar, but still like third-order, not fourth-order thinking.

Perfect Real Estate Storm?

Hell of a read at Reality Times' site: http://realtytimes.com/rtapages/20040624_perfectstorm.htm "despite record home ownership of 68 percent and recent job creations, that most workers in America do not make enough income to afford "even the most modest housing."

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