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Friday, Nov. 5, 2004
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The Jobs Report - Low Grade Bummer
The employment situation has remained stubbornly stuff in neutral to down since the first time George Bush took office. With the report out from the Labor Department this morning, it's clear to us that the Administration will need to come up with better excuses, or come to grips with the NAFTAfication of the U.S. labor markets in the second term. With that observation, here's the front of the press release from the Department of Labor's October Employment Situation Report:
Nonfarm payroll employment increased by 337,000 in October, and the un- employment rate was about unchanged at 5.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Construction em- ployment rose sharply over the month, and several service-providing indus- tries also added jobs.
Unemployment (Household Survey Data)
Both the number of unemployed persons, 8.1 million, and the unemployment rate, 5.5 percent, were essentially unchanged from September to October. The jobless rate has held fairly steady thus far this year and remains below its most recent high of 6.3 percent in June 2003.
In October, the unemployment rates for the major worker groups--adult men (4.9 percent), adult women (4.8 percent), teenagers (17.2 percent), whites (4.7 percent), blacks (10.7 percent), and Hispanics or Latinos (6.7 percent)-- showed little or no change over the month. The unemployment rate for Asians was 4.8 percent in October, not seasonally adjusted. (See tables A-1, A-2, and A-3.)
Total Employment and the Labor Force (Household Survey Data)
Total employment edged up in October to 139.8 million, and the employment- population ratio--the proportion of the population age 16 and over with jobs-- remained at 62.3 percent. The civilian labor force rose by 367,000 over the month to 147.9 million, and the labor force participation rate was unchanged at 65.9 percent. (See table A-1.)
Over the year, the number of persons who held more than one job rose by 519,000 to 8.0 million, not seasonally adjusted. These multiple jobholders represented 5.7 percent of total employment in October, compared with 5.4 percent a year earlier. (See table A-13.)
Persons Not in the Labor Force (Household Survey Data)
The number of persons who were marginally attached to the labor force was 1.6 million in October, about the same as a year earlier. (Data are not sea- sonally 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 429,000 discouraged workers in October, little changed from a year earlier. Discouraged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them. The other 1.2 million
Table A. Major indicators of labor market activity, seasonally adjusted
(Numbers in thousands)
______________________________________________________________________________
| Quarterly | |
| averages | Monthly data |
|_________________|__________________________| Sept.-
Category | 2004 | 2004 | Oct.
|_________________|__________________________|change
| II | III | Aug. | Sept. | Oct. |
_________________________|________|________|________|________|________|_______
HOUSEHOLD DATA | Labor force status
|____________________________________________________
Civilian labor force.....| 146,998| 147,681| 147,704| 147,483| 147,850| 367
Employment.............| 138,793| 139,607| 139,681| 139,480| 139,778| 298
Unemployment...........| 8,205| 8,074| 8,022| 8,003| 8,072| 69
Not in labor force.......| 75,975| 75,999| 75,973| 76,458| 76,342| -116
|________|________|________|________|________|_______
| Unemployment rates
|____________________________________________________
All workers..............| 5.6| 5.5| 5.4| 5.4| 5.5| 0.1
Adult men..............| 5.1| 5.0| 5.0| 5.0| 4.9| -.1
Adult women............| 4.9| 4.8| 4.7| 4.7| 4.8| .1
Teenagers..............| 17.0| 17.1| 17.0| 16.6| 17.2| .6
White..................| 5.0| 4.7| 4.7| 4.7| 4.7| .0
Black or African | | | | | |
American.............| 9.9| 10.5| 10.4| 10.3| 10.7| .4
Hispanic or Latino | | | | | |
ethnicity............| 7.0| 6.9| 6.9| 7.1| 6.7| -.4
|________|________|________|________|________|_______
ESTABLISHMENT DATA | Employment
|____________________________________________________
Nonfarm employment.......| 131,125|p131,521| 131,541|p131,680|p132,017| p337
Goods-producing 1/.....| 21,869| p21,927| 21,939| p21,935| p22,000| p65
Construction.........| 6,897| p6,932| 6,936| p6,945| p7,016| p71
Manufacturing........| 14,385| p14,403| 14,412| p14,398| p14,393| p-5
Service-providing 1/...| 109,256|p109,595| 109,602|p109,745|p110,017| p272
Retail trade 2/......| 15,047| p15,043| 15,049| p15,043| p15,064| p21
Professional and | | | | | |
business services..| 16,417| p16,523| 16,518| p16,562| p16,659| p97
Education and health | | | | | |
services...........| 16,874| p16,950| 16,965| p16,984| p17,046| p62
Leisure and | | | | | |
hospitality........| 12,324| p12,345| 12,341| p12,351| p12,364| p13
Government...........| 21,548| p21,625| 21,629| p21,673| p21,714| p41
|________|________|________|________|________|_______
| Hours of work 3/
|____________________________________________________
Total private............| 33.7| p33.8| 33.7| p33.8| p33.8| p0.0
Manufacturing..........| 40.9| p40.8| 40.9| p40.8| p40.7| p-.1
Overtime.............| 4.6| p4.6| 4.6| p4.6| p4.5| p-.1
|________|________|________|________|________|_______
| Indexes of aggregate weekly hours (2002=100) 3/
|____________________________________________________
Total private............| 99.8| p100.6| 100.4| p100.8| p101.1| p0.3
|________|________|________|________|________|_______
| Earnings 3/
|____________________________________________________
Avg. hourly earnings, | | | | | |
total private..........| $15.63| p$15.75| $15.76| p$15.78| p$15.83| p$0.05
Avg. weekly earnings, | | | | | |
total private..........| 526.62| p531.82| 531.11| p533.36| p535.05| p1.69
_________________________|________|________|________|________|________|_______
The statistic that we watch more closely than the headline number is Table A-12, the Alternative Measures of labor underutilization. We note that by this measure, unemployment increased from a September reading of 8.9% to an October reading of 9.1%, an increase of 0.2% http://www.bls.gov/news.release/empsit.t12.htm But even more interesting was the seasonally adjusted rate which pushed the A-12 reading up 0.3% to 9.7%.
I was absolutely shocked when I read an AP headline this morning that "Hurricanes Jumpstart Hiring - http://biz.yahoo.com/ap/041105/economy_5.html - because that makes it sound like the situation has really improved. Not.
Still, the report may be good enough to launch another rally day on Wall Street - and every move up now that we are above some key threshold numbers is just that much more ammunition to the bullish case which could portend a bounce by our guessing to the 12,850 range before the downside threatens again.
Troubled Bucks
We're seeing a bit of a come back this morning in the dollar-Euro exchange rate, but yesterday was notable in that the dollar fell to a 9-year low: http://news.ft.com/cms/s/a67665a0-2e8d-11d9-97e3-00000e2511c8.html Our guess would be that the dollar will rally today on the jobs report, and that gold will be beaten back for a few days from the $430 level, but with the free-spending needed to pump life back into the jobjacking damaged economy, the only option for the Bush folks is to print more money and the Fed will no doubt be accommodating. This also means that a 1/4 or even a 12% increase in the Fed funds rate will be dispensed on the 10th (next week) when the Fed's board meets.
The Reality Behind the Rally
We sat back for a few minutes on a break at the office yesterday and tried to figure out what was driving the markets to such frenzied new heights when all of a sudden it hit us. The rally could be fueled by comments that the Administration is thinking about allowing everyday folks to allocate at least some part of their Social Security payments to investing in the stock market. Now, if I were the only one seeing this as the driver, I wouldn't mention it to you, but here it is in Newsday: http://www.newsday.com/business/local/newyork/ny-bzwall054030415nov05,0,4299048.story?coll=ny-nybusiness-headlines As to whether the idea is a good one is a topic we will save for a future edition of our Inside Report. But before heading into the research phase, I would have to say that the move smacks of corporate cronyism, and that it would be analogous to giving the "strong hands" a bunch of weak ones to offload stock holdings to just before a Grand Super Cycle peak of the stock market. When the government says it's going to do something for you, we've observed that generally the opposite takes place. If government (and specifically the lawyers cabal in the Congress) had been able to keep its word about Social Security in the first place, we would not have the issue facing us today. But instead, what we have are a bunch of securities experts looking to lay off risk and watered down paper onto some unsuspecting "greater fools." And that, in short is one driver behind the market.
While it's not especially pressing right now - the legislation has not been passed and it's a slow motion process - the outline is there so we can expect that over time, the legislation will be allowed, shares will be seriously bid up (and our inner target would be a Dow over 13,000 somewhere) before the whole thing finally collapses into a jumbled mess. If the reform of social security allowed me to buy hard assets like real estate including farm land, or gold and silver, I would be far less skeptical. This seems to smack of lining up a bunch of suckers and without the disclosure that past performance is no assurance of future returns. Oh hush my mouth...just let the trend be your friend, I guess...
Arafat Losing
The word is that Palestinian leader Yasser Arafat is not technically dead, but it's close at hand judging by the sounds of reports such as this one: http://news.bbc.co.uk/1/hi/world/middle_east/3984711.stm The real problem ahead is who will take over the leadership of the Palestinian Organization once Arafat checks out.
Ivory Blowing Up
That problem in the Ivory Coast is getting bigger on a daily basis. http://news.bbc.co.uk/1/hi/world/africa/3984955.stm Although the accounts only mention the factions by name, we'd bet a beer to about anyone that when the cordite clears, the battle will turn out to be (or lead into) another skirmish with militant Islamists who are trying to stake out oil turfdoms.
Fallujah the Islamic Masada?
If you haven't read Ernest Gann's "Masada," it's worth the read. I think about the book now and then because it's the tale of how a few dedicated people were able to hold off a huge attacking force even though the rock they were on the Middle East was surrounded by soldiers for an extended seige. I won't tell you the whole story, but when we read about Fallujah being cut off by allied forces, we think about how religious warfare had ended in the past. (Hint: rhymes with sadly). http://news.bbc.co.uk/1/hi/world/middle_east/3985493.stm
Russian Oil Woes
Although it may not immediately have an impact in the West, a barge accident on Russia's Volga River has tied up transportation there for perhaps several weeks: http://www.mosnews.com/money/2004/11/05/bargecrash.shtml The reason that we're not worried about this latest oil problem is that overall, prices are now in retreat http://olympics.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6728669 and that's yet another factor fueling the melt up in stocks.
Thursday
The Growing Rally: Casting Aside Trouble?
This weekend's topic for Inside Report has just been expanded! We have been watching with awe as the market has been making huge gains for the past two days - and with today's action, it looks like the longer term picture may break out into an extended rally, efforts of America's enemies to derail our economy notwithstanding. So this weekend, we will go through the implications of our Aggregate Index and the Dow - not to make specific upside target projections (but we'll include those too) but to explain how this will likely be the last chance for many Americans to secure their personal safety and future as resources and trade seem destined to crater a year or so from now. We still see a couple of wave counts - and this may be a sucker rally - but we'll piece it all together as best we can. This will all be in addition to our piece on the return of tribalism and affinity groups which may be leading to a "clash of theocracies." If you're not a subscriber, click here: Info. I don't think you'll be disappointed. This is not a site offering financial advice. This is a site that discusses current news events and explores their implications from the perspective of long wave economics, which is the study of events in the economy persisting over decades...
Portrait of a Dollar in Trouble
As I write this - and on reports of trouble with oil - gold is up more than $8.00 on the day. Look for it to fall back, but the move above $430 looks like it's really here. We see this morning a number of items that were bound to happen following the Presidential Election, irrespective of who the winner was - and the market, we anticipate will shortly return to its under 10,000 level unless the Plunge Protection Team has nearly a whole deck of aces up its sleeve. Let's begin with the currency itself. The Euro is powering to new highs relative to the dollar today: http://biz.yahoo.com/ap/041104/euro_rally_2.html. It means that oil, denominated in dollars, has gone up again - if you're new to the game, as the dollar goes down, oil, along with everything else we import, tends to go up in apparent price. http://biz.yahoo.com/ap/041104/oil_prices_5.html. As for what's driving the dollar lower, you have your pick of...
-
The manic printing of currency by our Federal Reserve - which is now about to face the music for its previous lithographic excesses.
-
The reality of Peak Oil which is beginning to be noticeable even in the most jaundiced, pro-establishment energy forecasts.
-
The U.S. national debt, especially in light of tax relief that's designed specifically to under fund repayment.
-
The deteriorating balance of international trade.
-
Did I mention the runaway presses at the Fed and our reliance of paper to store value?
A note I received from G. Lammert this morning sound's pretty tantalizing: "George, barring hyperinflation, yesterday's trading day will be the high for the world equities for the next 2 decades. Soon I will send you a simple very understandable description of the fractals in a contracting credit cycle; I'll let you decide if they are not completely perfect. It is incredible. G. Lammert" Shorting today seems like a no brainer, but then again, I've lost several Lexi worth betting against the house before I came to realize the power of intervention...
No Easy Exit
A number of people I know have told me they are seriously considering relocating to another country in the wake of the latest Presidential election. But if you've been thinking about relocating to a less "drafty" (but colder) Canada, you might want to toss your paperwork in the hopper early because the exits are tightening up: http://www.reuters.com/newsArticle.jhtml?type=domesticNews&storyID=6704292 We've also read elsewhere that Americans wishing to emigrate to other English-speaking countries will have a good-sized wait ahead of them - a year or more.
Iraq Oil Attacked
What's being described as the biggest attack yet on oil infrastructure in Iraq is being reported today in the Arab press: http://english.aljazeera.net/NR/exeres/CA6FA2DE-56FF-4064-A7F0-0A795317521C.htm Not that this is directly responsible for oil being back over $50 (and gold up again, too), but with supplies continuing tight and no prospect of relief, attacks on oil systems are definitely something to keep an eye on.
Hil in 08?
If you thought I was a bad faith republican because I didn't jump on the Bush bandwagon, you will see me being twice to three times as skeptical of Hillary Clinton who is now being seriously talked about as presidential material in 2008: Link Now the problem I have with such talk is not that it is wildly premature (although it is). My issue has to do with a so-called two-party system where the party out of power has failed to show leadership. It's almost like the democrats have been co-opted by the same corporatist forces that caused me to leave the drifting republicans (with the lone exception of Ron Paul's brand of Republicanism which is true to the Constitution). If Hillary is the Democrat's choice in 2008, it will be a sure sign to me that the country is no longer free and that corporatist checkbooks have basically written a bunch of checks to PACs and have bought the country's political infrastructure, lock stock and barrel.
Backing off Iran
We have in the British press this morning a report that the Brits are labeling the idea of an attack on Iran as inconceivable: http://news.bbc.co.uk/1/hi/uk_politics/3981307.stm . There are two ways this could be read. First would be the old sucker-punch notion where the West would say "No attack" and then launch one. The other possibility is that the word from the Russians that they would make molten glass out of a large part of Israel, was an accurate rumor and that the Brits have chosen to acknowledge it, thus telling the Russians via the back channel that they've gotten their way. This would leave Russia free to sign their reprocessing deal with Iran in December.
Gorby's Outlook
Mikhail Gorbachev has an interesting take on where he expects world developments to turn - and specifically, he looks for some changes in how the Bush Administration runs international relations in the wake of growing anti-American sentiment in many parts of the world: http://www.mosnews.com/news/2004/11/04/gorbachev.shtml We think some of what Gorbachev has to say may be valid. The dance we can see the outline of goes something like this:
As the U.S. dollar continues to decline, and sinks below levels where the damage can be reasonably controlled, the Bush Administration will begin trying to jawbone the world into believing that the U.S. is really acting in everyone's global best interest. However, because the value of the dollar could fall faster than excuses - outrunning the currency tide change - the U.S. could easily get into a situation where efforts to stem the declining faith in the dollar as the international reserve currency are inappropriate. That sets up the possibility of a global economic crash - or at least major recession - and the continued NAFTAfication of working conditions for Americans.
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Wednesday
Post Election Wrap
Despite predictions of some that the election would fall to John Kerry, it doesn't look like that will happen. It's turning out pretty much as we had feared, without a clear mandate. Yes, George Bush has picked up the majority of the votes, but then again, there are the expected comments about how the voting was carried out in certain areas: http://iht.com/bin/print_ipub.php?file=/articles/2004/11/02/news/observe.html.
Over the course of our campaign writing, we were pummeled by both the right and the left - some republicans calling our coverage leftist, while the democrats who wrote in called our coverage pro-Bush. In the end, what I tried to do was follow the Constitution, but it seems that's a pretty radical thing to do.
We will likely see several things today. First, we expect George Bush to make his victory speech and call on democrats to lay off and start working at pulling a seriously divided country back together. We expect democrats will, as John Edwards promised last night, to "fight for every vote" in an attempt to make sure everyone is counted correctly. Yes, that may mean court challenges. As a result, we expect the market to react with uncertainty today as we could be in for a rerun of the election going to court. http://www.thestate.com/mld/thestate/news/special_packages/election2004/10088685.htm We agree with one reader who said "Left Wing Desperation?" Sure looks like it. There's a time to debate (before the election) and there's a time to close ranks and be a unified country. We're all Americans, after all.
The lack of the clear mandate - and implications going forward - will be the subject of this weekend's Inside Report which will get into the future of tribe and affinity groups - a very good synopsis of how the people side of this election played out. Subscription Info.
Red State Targets
There's one hell of a scary story in today's New York Post - it posits that states which voted for Bush will be the first targets of al Qaida's next attack: http://www.nypost.com/news/nationalnews/33124.htm
Iraq War Continues
No magical change in the fighting with insurgents in Iraq. Today, a top Iraqi oil official has reportedly been killed: http://news.bbc.co.uk/1/hi/world/middle_east/3977379.stm We expect Homeland Security officials here to step up security even more over the next few weeks here in America. We know from the tape from Osama bin Laden issued last week that a Bush victory would likely cause a 9-11 type reprisal, and interestingly, some of the foreign press have interpreted that to mean a WMD/nuclear attack on American soil. We pray that won't be the case.
Iran to Heat Up
The Russians are reporting this morning that they intend to sign a deal with Iran in December to received spent fuel rods from Iran: http://www.mosnews.com/news/2004/11/03/iran.shtml We think this is the definitive part of the overall Middle East to watch, as Russia has reportedly taken Iran under her security blanket and draw a line in the sand to U.S. and Israeli leadership through back door channels. This leaves us with India-Pakistan and Iran-Israel as the two flashpoint for a regional nuclear conflict that could rapidly go global.
The Global Clash With Militant Islam
Another thing that hasn't changed with the apparent re-election of George Bush is the conflict between militant Islam and pro-democracy or Christian and other religious interests in Asia. Take, for example the report of the latest fighting in the Philippines: http://english.aljazeera.net/NR/exeres/84039BD6-0E95-47B2-AA2D-F3C9FB4AE7EF.htm Whether we like to contemplate it or not, there is a huge groundswell among third world and lowest income people to accept Islamic beliefs and with many of those people occupying strategically important areas, the level of conflict is almost certain to rise.
Lower Oil Predicts
An official with OPEC has told Chinese interviewers that he expects the price of oil to drop down to the $50 range and stay there or below: http://news.xinhuanet.com/english/2004-11/03/content_2171828.htm Our own view of oil is that it will hover around $50 for a while, but now that the election is over, watch the price of gasoline at the pumped. We expect an increase of $0.20 to $0.30 a gallon in most parts of the country as crude price increases which were temporarily absorbed by oil interests as an election gesture, will now return to fully priced status. That would put premium at $2.70 - $2.90 a gallon here in the L.A. area if our expectations are realized.
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Election Day
Early Returns
VOTE!
Right Wing Shenanigans?
Let me give you the facts and see if you can make up your mind for yourself. There I was, laying in bed a few minutes before 5 AM here in Burbank, listening to the local Clear Channel Communications radio station KFI. Coast to Coast AM had just ended and it was not yet time for the news. On comes the unmistakable but unidentified voice of Rush Limbaugh with a scathing attack on the Democrats in general and John Kerry in particular. The message was all about what a bad choice Kerry would be and how today Americans need to vote republican.
Here's the question I have - and it's a simple one - is that legal?
I didn't hear any identification of the speaker - no introduction to the message - and no one from the station came on and said "It was commentary" or "The views expressed in the preceding message are those of Rush Limbaugh" or anything else. It was just a rant.
I thought there were rules against a radio station running an unidentified ad for candidates. What I heard sounded like a 60-second spot ad for George Bush and the republican party with no disclosure information provided about how it got there. so I called the Federal Election Commission this morning and asked them about it.
While they couldn't give me any details about who else has complained about this, they told me there are many, and they said there's some case law about a media exemption. That said, they invited me to file a complaint - and this practice has apparently been going on for a couple of months. The complaint form, in case you're interested is at http://www.fec.gov/pages/brochures/complaint_brochure.pdf
The most balanced and fair coverage of our election seems to be coming from overseas media like the BBC: http://news.bbc.co.uk/1/hi/world/americas/3973703.stm It's a hell of a note when al Jazeera coverage seems less biased than what comes out on the local radio and television outlets: http://english.aljazeera.net/NR/exeres/40CA2683-69CC-4E1A-8490-E5FA376E18FF.htm
I have to wonder if this kind of electioneering isn't a natural fallout of the FCC abdicating the public necessity and concern in their headlong push to give large corporate supporters more concentrated power over the nation's airwaves.
But this isn't an isolated case of republican election pressure. Here's another one: http://www.argusleader.com/news/Tuesdayarticle1.shtml
Weird Dream
I woke up this morning at about 12:30 AM Pacific time after having an odd dream about an earthquake. The image I had in the dream was of a power line going down, almost flipped upside down. As soon as the power line was down, the forested hillside I was standing on, watching this power line down at the base of the hill arc and spark, started moving. Trees didn't fall down, but there were some cracks developing in the earth. The message from the dream was "when the power goes off, go outside because a huge quake is coming. Odd, to say the least. But it gets better:
I went back to bed and didn't think any more about it. Three hours later, I got up again and was shocked to read this:
A magnitude 6.5 earthquake IN THE VANCOUVER ISLAND, CANADA REGION has occurred at: 49.26N 128.87W Depth 10km Tue Nov 2 10:02:13 2004 UTC
Time: Universal Time (UTC) Tue Nov 2 10:02:13 2004
Time Near Epicenter Tue Nov 2 02:02:13 2004
Eastern Standard Time (EST) Tue Nov 2 05:02:13 2004
Central Standard Time (CST) Tue Nov 2 04:02:13 2004
Mountain Standard Time (MST) Tue Nov 2 03:02:13 2004
Pacific Standard Time (PST) Tue Nov 2 02:02:13 2004
Alaska Standard Time (AST) Tue Nov 2 01:02:13 2004
Hawaii Standard Time (HST) Tue Nov 2 00:02:13 2004
Location with respect to nearby cities:
190 km (120 miles) SSW of Port Hardy, British Columbia, Canada
245 km (155 miles) W of Ucluelet, British Columbia, Canada
415 km (260 miles) WNW of VICTORIA, British Columbia, Canada
420 km (260 miles) W of Vancouver, British Columbia, Canada
There it goes again, that "voice that warns me in advance" again. I had dreams about the quake at 12:00 -12:15 AM. The actual event happened just about exactly two hours later. I get these things everyone once in a while and they are freaky.
Weapons Grade Garage
There's a report today of a Russian scientist who has turned over weapons grade plutonium that he was keeping in his garage - about 14 ounces of the stuff - about half the amount needed to make a bomb and plenty to make a "dirty bomb": http://reuters.myway.com/article/20041102/2004-11-02T115205Z_01_L02531020_RTRIDST_0_NEWS-RUSSIA-PLUTONIUM-DC.html Russian coverage of the story at http://www.mosnews.com/news/2004/11/02/plutonium.shtml
Iran Focus
We've been hearing from our sources that the Russians have told the U.S. and Israel through the back channels that if even one person in Iran or Syria is harmed by Israelis or U.S. forces, Russia will launch a preemptive attack on Israel and will make a glassy plain of the place. We've further heard that the reason for this is that Russia is in tight with Iran which plans to being floating the Golden Dinar [ GD] (a gold backed Islamic currency) in January of 2005 and that this will be followed in last 2005 or early 2006 with an alternative oil bourse (alternative to London) where the medium of exchange will be GD's or Euros.
We mention this because it now puts into clear perspective the Russian motivation for so many militant statements lately about maintaining nuclear parity with the U.S. Today, just for an example, the Russians are talking about a successful launch of an ICBM from a sub: http://www.mosnews.com/news/2004/11/02/missilelaunch.shtml And now we understand the real game going on.
As soon as the Golden Dinar and a Euro denominated bourse opens in Iran, the U.S. dollar backed only by tax-cutting spendthrift signatures will crater and take down the world economy with it. But don't worry, it's not all bad news - at least oil demand will moderate.
Today's edition will be short and to the point - get out there and vote!
Monday
One Day Left
The national rap session and much gnashing of teeth is just about over - and as things wind up today, we see George and John both going at it like a couple of kids on the school yard. Both claiming the other is the lesser choice and that each is the best hope for Americans: http://news.bbc.co.uk/1/hi/world/americas/3969605.stm
One particularly astute reader noted in an email to us: "It's also known as the Redskin indicator and so far it has a perfect record. By the Redskin Indicator Kerry wins the election. Ve vill see." http://www.boston.com/dailynews/305/sports/Redskins_lose_so_Kerry_should_:.shtml Ja, vee vill.
My own expectation is that neither Bush nor Kerry will get a "clean" win. In other words, I expect that we will see a showdown in the courts this time - just as we did in the last presidential election - and that such behavior will make us the butt of more jokes among citizens of other countries. But, of course, none laughs too loudly.
We also sense an increasing sense of militancy among a broad range of people who we would not have normally considered militants. You might want to click over and read the article in the current issue of Nexus Magazine about the Rise of a New Global Activism - a reaction to the corporatist slave trade - hidden behind the facade of cheap labor arbitrage: http://www.nexusmagazine.com/articles/The%20New%20Global%20Activism.html Not that it means any great number of people will become angry and turn violent at an expected legal challenge, but it sets the stage for some interesting developments including possibly large-scale civil disobedience.
It's that possibility that sent us scampering over to www.johntitor.com to read what a purported time traveler wrote Nov. 7, 2000:
(16) There is a civil war in the United States that starts in 2005. That conflict flares up and down for 10 years. In 2015, Russia launches a nuclear strike against the major cities in the United States (which is the "other side" of the civil war from my perspective), China and Europe. The United States counter attacks. The US cities are destroyed along with the AFE (American Federal Empire)...thus we (in the country) won. The European Union and China were also destroyed. Russia is now our largest trading partner and the Capitol of the US was moved to Omaha Nebraska.
It wouldn't be much of a stretch to see a "no mandate" (meaning no clear-cut majority vote) result in the kind of dissent that coupled with economic exploitation, could bring such an outcome.
We'll be watching the market's reaction and the global reaction starting tomorrow night, but if we had to do a PowerPoint presentation, it would be just a few slides:
Slide 1: No clear mandate and a close vote (graphics)
Slide 2: Legions of lawyers ready to pounce - and from both sides.
Slide 3: Global uncertainty over Kerry
You get to have significant input on Slide 4 - by voting.
I can't speak for you, but I'm getting a whole pile of last minute desperation emails from both sides of the election - last minute slurs not even worthy of a mention. Plus, when I read stories like the one from Bloomberg news that employment growth accelerated in the most recent month - a report coming out ahead of the news release later this week - I take that with a grain of salt. http://quote.bloomberg.com/apps/news?pid=71000001&refer=home&sid=avn64.gOLNdI The reason for my skepticism? The happy talk sounds a little too pat for me, especially when I recall the remarks of the "media mayor" at the RNC this year: http://www.washingtonpost.com/wp-dyn/articles/A46503-2004Aug30.html Nope - time to shut down everything having to do with the election. Were it up to me, we would have a "news free" day ahead of elections so people could digest the facts without the slop that passes for "reporting." the last minute details.
Oil Stalls in Kuwait
Don't expect to see too much on the mainstream press about this, but power cuts have caused petroleum operations to come to a screeching halt at three refineries in Kuwait: Link
Also of interest - but only if you drive a car or like to eat food which is moved around by internal combustion engines - is the report noted at www.lifeaftertheoilcrash.net that says the end of the "cheap oil age" is here: http://www.post-gazette.com/pg/04305/403996.stm
And lest you forget, here's more on growing Chinese demand for oil, something that will be almost certain to keep bids up: http://news.xinhuanet.com/english/2004-11/01/content_2162628.htm
Target Iran
Let me see if I can put this clearly enough: The Bush administration's neocons no doubt have a clock ticking as the election comes up - because regardless of whether they win or lose the election tomorrow they will still have time to kick off a war with Iran. Now, the simple matter of the surface is proliferation of nuclear weapons. The front story (e.g. the one you will see hyped by the far un balanced BushNews media) will be that Iran is too dangerous to be allowed to hold nuclear weapons. They will pontificate at great length how a nuclear Iran would "threaten the security of Israel" - ignoring that the rabid proponents of Great Israel already have 264 warheads of their own. Besides, they will say, Iran has now dug in its heels after an appeal by the international community: http://english.aljazeera.net/NR/exeres/742300D8-6741-4BBF-A9F1-6DB3CC608050.htm
So the front story is http://news.xinhuanet.com/english/2004-10/31/content_2160944.htm But here's the back-story: The real reason for the neocons turning their Israeli bombers equipped with U.S. built munitions loose on Iran before inauguration day is that Iran is trying to start up a new oil trading bourse which would compete with the corporatist controlled and U.S. dollar denominated exchange in London. Specifically, the Iranians have made clear their intention to trade in Euros and maybe the new Islamic golden dinar.
See how this rhymes with the Iraq war? Once again a "front story" about WMD's, then terror, then militants while the real motivator, the back-story, is again anything that will challenge the house of cards called the Buck. The reason we can let government like Pakistan have nukes is that they are near China and they don't have oil ready for hijacking.
Not that we need another war front. The Iraq conflict continues with daily headlines about Iraqi officials being assassinated, with the most recent being the deputy governor of Baghdad: http://news.bbc.co.uk/1/hi/world/middle_east/3970619.stm
Islamists in China
There's martial law in a small, but watched part of China today due to trouble with the militant Islamic factions clashing with militant Chinese: LINK
Normally we would not be too interested in the doings in central China, but our reason for interest in this is the reports, circulating around some web sites, that no less than Osama bin Laden might have been in China until recently - allowed there says the rumor - in return for his involvement in in keeping the lid on religious unrest in the area. While such reports seem a bit far fetched, they are interesting in light of Osama bin Laden's comments in his latest video communiqué issued last week, the timing of which is too coincidental for Walter Cronkite who wonders is this isn't a bit much like something Karl Rove would pull: http://www.drudgereport.com/flash7.htm
The Return of Religious Warfare
The idea of Muslims squaring off against Christians in Africa as a proxy for the oil war there picked up more steam over the weekend as fighting raged in Monrovia, capitol of Liberia. Yes, a big part of the problem is Muslim groups left out of the "peace" process: http://news.bbc.co.uk/1/hi/world/africa/3970971.stm We note that because there is oil in the area, Western interest in this conflict will be high.
Meantime, in Russia there is a dispute brewing over a Muslim groups construction of a mosque: http://www.mosnews.com/news/2004/11/01/vladimirmosque.shtml
If you had asked me 20-years ago "What's the biggest threat to world peace?" I would have answered with something like "The arms race and the competing interests of capitalist versus socialist states." If you were to ask me what's changed in 20-years it would be something like "I'm shocked at how religion and tribalism have returned so quickly to their traditional role of being drivers of warfare. I point to Islamic fundamentalism, rabid Zionism, and Dominionist Christendom as examples. If you haven't thought about Dominionist Christendom, go read the piece at http://www.yuricareport.com/Dominionism/ConstitutionRestorationAct.htm as a backgrounder. Or see http://www.secularhumanism.org/library/shb/koepsell_20_2.htm for the cultural warfare perspective.
What we have ahead is a layer cake of resource depletion due to excessive consumption on the surface and a polarization of the world into religious/tribal affinity groups.
Now, to put this into easy-to-understand perspective, click over to the "Coming Dark Age" web site and read how all of this fits into the larger picture of geo-political energy conflict: http://www.darkage.fsnet.co.uk/Iraq.htm
It's not a pretty picture to contemplate, nor is it one easily changed by simply voting in America so we smugly sit back and watch the Cyclops' skewed reality unfold and cast our votes with a certain sense of detachment until one day our media bubble bursts and we realize that at some point even the most pacifist may be forced to pick up a machete and choose a tribe to throw in with, much as is happening in Liberia. It takes only a lack of water, food, or "reality TV" shows to push us into the new "gathering storm" and our acceptance of the tribal interest group need not be complete.
Tribes are affinity groups and whether you realize it or not, you're being recruited every day in a hundred and one subtle ways. Your membership being bought and paid for by your addiction to free spending and the concepts of interest and wealth. Long noted by authors like Jerry Mander (Four Arguments against Television, 1978) television has relinquished its role as a religion in and of itself. Instead, it has been morphed into a tool of New Tribalism - something we'll explore in more detail - with an eye toward its economic consequences) in next weekend's Inside Report. (subscription info).
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