What's "Winning"?

Lynne Cheney, wife of VP Dick Cheney laid into CNN Friday, asking the network's Wolf Blitzer "Do you want us to win?"  The whole story is worth a considered read. It also raises a very difficult question: "What's winning?"

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If "winning" is getting rid of Saddam Hussein, that was done a long time ago.  If "winning" is turning on Iraqi oil, then Iraq is back to near pre-War levels.  But if the definition of "winning" is installing a US-friendly regime which can respect human rights while getting the Arab world version of the Hatfields and McCoys to pay down arms and embrace democracy, sorry, I'm skeptical that can be done.  Picture if you will, what would have happened if England had put troops into the US and tried to quell the US Civil War.

So while Mrs. Cheney's point is well taken, the broad question - which I'm not clear on - is what the hell is the definition of "winning" this mess?  I don't think anyone has written that down, at least so far as I've seen.  Lots of jingoism about "spreading democracy" and "self rule" but I still can't figure out where the goal post is, unless it's a mass conversion to Christianity, installing a local republicorp Lite friendly to US corporations, purple fingers, and free oil?

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Meantime, a government report says a Halliburton subsidiary hid contract information in ways that weren't correct.

Oil Threats

Saudi Arabia (the home of terrorism, Osama bin Laden, etc) has been expecting an attack on its oil infrastructure.  Didn't seem to faze oil traders, though, as prices came down a bit Friday.  The Chinese media notes the US is ready to step in.

Israel's Weapons

The British Press is running stories about Israel using weapons banned by the Geneva Convention against Lebanon which - oops - they didn't sign.  But then neither did the US. Which is why cluster bomblets are still going off in Lebanon long after the so-called cease fire. What happened to the moral high road here?

Dirty Politics

If you think that's a bit overstated, then read the NY Times piece on the use of hand sanitizers by politicians these days.

St. Louis Wins

Wins what?  Oh, the World Series.  I didn't watch a bit of it - sorry to say.  Usually I try to watch the final inning of the final game, which is plenty of baseball for me.  To me, baseball is a social event, as much as a sport.  You go to a stadium - get a couple of brewskis and hot dogs - and the game is almost incidental to the conversations in the stands.  We've been too busy to take time out for such things.

Fire

That wildfire in California which has killed four fire fighters is up to 40,000 acres now. but officials say progress is being made toward containment.

Revolution/Rebellion Meme

Striking now in Bangladesh.

Time Machine Note

Turn the clock back tonight.

Too Far Ahead

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Don't be Poor Richard

Ben Franklin's Poor Richard wouldn't have been so poor if he read our common sense "How to live on $10,000 a year or less" - one of our many ebook titles at the Peoplenomics bookstore for just $10.  Watch for a couple of new titles next week, by the way.

Pass it On

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Friday October 27, 2006

A Novel Political Mess

We haven't gotten to the Constitutional Crisis part (that begins Nov 6, just before the elections) but a high profile Virginia US Senate election has turned into something reminiscent of what the web bots have been predicting for this time frame - politics and sex - and in particular, underage sex.

It seems the incumbent republicorp George Allen has discovered his opponent's (Jim Webb's)  fictional novels - and in them he finds descriptions of underage sexual encounters, according to the Drudge Report.

As various comments start popping up, this is definitely a topic to watch. Meantime, Allen is going after Webb on his marriage stance and tying Webb to Hillary Clinton as a "liberal ally."

As usual, I won't take sides in this just based on first reports.  Instead, I will go look for a little data.  And, the first place I find is it at Amazon.com where Webb's book in question ranks 3,260 in sales (a good ranking) and the Publisher's Weekly's review at Amazon reads (in part):

"Webb's cultural and political portrayal of Vietnam 25 years after the war's end is delivered with such bold strokes and magical detail that it really doesn't matter that the plot itself is relegated to the backseat. This is a highly personal and empathetic look at today's Vietnam, a land of misery and inequity, yet one still vibrantly alive. The story follows the experiences of Brandon Condley, an ex-Marine whose job it is to find missing American soldiers, dead or alive. Condley is trying to track down Theodore Deville, an army grunt who not only deserted his unit in 1969 and killed a fellow serviceman, but then joined the ranks of the enemy. Condley is convinced Deville is still alive, operating somewhere in southeast Asia's underground economy. Webb introduces a rich cast of supporting characters as Condley pursues his quarry across Vietnam, Australia, the former Soviet Union and Thailand. "

And part of the "Library Journal" review of Webb's book reads (in part):

"The center of this fine novel is the search for two army deserters who led U.S. troops into ambush and then hid in North Vietnam after the hostilities ceased. Like the best of such tales, however, the novel offers more than the resolution of a mystery: it also tells a poignant story of a love that might have been and of friendship across partisan lines and is rich with the sounds and smells of its foreign setting."

Hmmm, the Jim Webb novel sounds like one of those "chased 'round the world stories, perhaps like Louis L'Amour's "Last of the Breed" which for my reading time, was one of the best - right up there with Nicholas Monsarrat's "The Time Before This." But let's not compare reading lists..although I'd recommend these last two.  Webb's book is not on me "must read list.".

That said, now my suspicions:  I suspect that this is a last minute cheap shot by the incumbent republicorp, who realizes most people won't read the review of the book (generally good) and won't take the time to read anything - especially in the Virginia's Bible Belt where the republicorp is trying to hoodwink the religious right.  Again.

Its also clear to me that this is desperation politics at its worst - but then again, there's nothing novel about that, is there?

Moment of Silence

For the four fire fighters who were killed fighting what is now about 24- thousand acres of wildfire in the hills east of Los Angeles.  A $100,000 reward is offered in the hunt for the arsonist.

Faltering GDP

The Bureau of Economic Analysis is out with it's latest GDP report - and it's not doing very well: Up at an annualized rate of only 1.6% in the third quarter.

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 1.6 percent in the third quarter of 2006, according to advance estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.6 percent.

 

The Bureau emphasized that the third-quarter “advance” estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The third quarter “preliminary” estimates, based on more comprehensive data, will be released on November 29, 2006.

 

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, equipment and software, nonresidential structures, and state and local government spending that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

 

The deceleration in real GDP growth in the third quarter primarily reflected an acceleration in imports, a downturn in private inventory investment, a larger decrease in residential fixed investment, and decelerations in PCE for services and in state and local government spending that were partly offset by upturns in PCE for durable goods, in equipment and software, and in federal government spending.

 

Final sales of computers contributed 0.10 percentage point to the third-quarter growth in real GDP after contributing 0.04 percentage point to the second-quarter growth. Motor vehicle output contributed 0.72 percentage point to the third-quarter growth in real GDP after subtracting 0.31 percentage point from the second-quarter growth.

Buried on Page 3, we read that:

"The personal saving rate -- saving as a percentage of disposable personal income -- increased from a negative 0.6 percent in the second quarter to a negative 0.5 percent in the third. Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from previous periods."

So yes, just common folks like us are still taking money out of the bank and real estate equity to make ends meet.

Body Counts

Iraq so far this month: 92 soldiers dead.  Iraqi police killed today: 24. Afghanistan today: 14 dead.

I don't like "body count" stories, but they're a byproduct of long wars which have no clear exit points.  I saw the same thing in late Vietnam War coverage.  Over time, people get desensitized to the horrors of war, and it becomes more a daily box score than anything. No doubt Bush Iraq advisor Henry Kissinger knows this, too.

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Meantime, Two TV networks (CW and NBC) reportedly have barred the commercial for the new movie about how the Dixie Chicks got thrashed for expressing a political view.  Commercial for the flick here.  Seems we're only free to agree, si?

Mass layoffs

The September mass layoff picture is in - and it's positive - that's if you believe the numbers which I have to admit I'm skeptical of...

Somehow, I expect a blip up after the elections - as soon as the October report comes out well after election day.

Sun Rising?

Yes, that one, of course.  But also perhaps Sun Microsystems on a smaller than expected loss.  And Microsoft is showing good profits on servers and games.

But the real story in virtual worlds is the battle between the browsers.  While the Gartner group heaps praise on the next Internet Explorer, there are some, like Duncan McLeod, who figures that if IE 7 doesn't catch on, Firefox 2.0 folks will perhaps never go back.  Mozilla downplays 2.0 Firefox bug reports.

Me?  I'm still not clear on which version of Vista I will need to buy, except that I'm sure Microsoft will have figured out some way to force me as a business user to buy either the top of the line or next to it, version. Kiss off $300.  

There will apparently be 5-real versions of Vista, not counting the "Starter" weakling.  And, I wonder if I buy Office 2007 if it will be compatible with previous versions - I have friends who are still content with Office 97.

And not to gripe, or anything, but you know that FrontPage support is leaving with the smorgasbord of FP replacements comes along - it's almost like Microsoft's marketing geniuses are really covert plants from either DreamWeaver or the open source movement.

Standby for War?

With the US about to conduct naval exercises in the vicinity of Iran, we can't help but note that stories are now appearing in Western outlets about how Iran has started up a second centrifuge line.  While the stories may be valid, coming from the Iranian Student News Agency, we can't help but wonder about the timing of the report and whether this is a "set up" for a conflict/showdown with Iran just ahead of elections here.

Too Far Ahead

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Don't be Poor Richard

Ben Franklin's Poor Richard wouldn't have been so poor if he read our common sense "How to live on $10,000 a year or less" - one of our many ebook titles at the Peoplenomics bookstore for just $10.  Watch for a couple of new titles next week, by the way.

Pass it On

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Thursday October 26, 2006

GBO: Data Suggests Global "Weimarization"

GBO= Global Blow Off and The Fed, as we reported yesterday, didn't budge in their rate quandary - at least for now. As a result, the US dollar is down some this morning - and as the dollar goes down, the effective price of gold goes up - nearly $5 for a while this morning.

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This is all indicative of the confusion caused by the most complex financial markets in history.  Complexification, as we've called it, results in some very strange things.  Last week, I explained how the bundling of nonperforming loans actually drove up the stock market (by securitization of bad debt into asset-backed securities [ABS's]).  This week, we can consider the incredibly complex pressures on the dollar. And a phenomena that I'll just call Global Weimarization, named after the most explosive inflation in recorded history. A few to ponder:

• Global Hidden Hyperinflation is here.  The dollar should  be going down because of the continuously bloating federal spending - wars aren't free.  By itself, this would argue for a declining dollar because we're just printing up more paper, but how much isn't clear since the Fed knew this was all coming and hid their M-3 broad monetary measure back in March of this year.  Suckers and fools is what they must figure us for. But you know that inflation is running like a forest fire globally, right?  Global inflation is immense - mind boggling.  In the UK, for example, the rate of inflation is an annualized 14.1%!  And Interfax reports today the money supply of Russia is up an amazing 28.2% (measured by the Russian equivalent of M-2) by 28.2% year to date!

• Other data points supportive of the "Global Weimarization" mere include Israel, where inflation has cooled off (!) to 12% a year, and China where inflation is percolating along at 16.8% year on year (YoY) on their equivalent of M-2.

• Of course, one way for the dollar to hold its own would be for the Fed to pay foreigners more money to hold our paper, but they couldn't do that at yesterday's meeting because of the pending elections.  Thus, in December, don't be surprised at a Fed rate hike - which will lead to more pain in the housing industry - because the Fed needs others to buy our paper and a rate hike is an effective discount increase.  As Mark Brandly writes for theLudwig von Mises Institute, the days of 12¢ hamburgers and $600 cars is just a dream when the printing presses are turned on globally.

• Oil is showing some of the effects of the slightly weaker dollar this morning.  But, remember that on a utility value basis, oil is worth about the same now as always.  It's needed for fuel, plastics, and the rest.  But when the dollar drops in purchasing power, the price we pay for oil seems to go up because of the reduced wallop of the underlying dollars. It takes more "weak paper" to buy the same goods.

• And now - this interesting little revelation for you: There's a case to be made that if the dollar drops, at least initially, the stock market could be propelled upward.  The reason? There was once a time when stocks were valued based on their ability to produce earnings and dividends (e.g. free cash) to owners.  But lately, ownership of stocks has changed fundamentally.  Stocks in some ways act like real estate insofar as you're not buying a dividend stream, you're buying a "property" and with that you're buying "market position" and "niche."  Further, a stock - even a declining one - has securitization value - so you can roll more layers of debt into play.

Just as domestic inflation in moderation can drive up the price of an asset like an apartment building, so too can inflation (masquerading as the declining value of the dollar) drive up the price of stocks because they are now more valued as assets than free cash flow generators.  As long as the future looks secure, there are probably more curious distortions ahead - thanks to derivatives and the whole process of complexification.

To paraphrase the old Rod Stewart song, "Every picture tells a story" we offer our Global Index (usually for Peoplenomics subscribers only) as evidence that we're now in something that looks suspiciously (to me) like a Global Blow Off:

If all of this is too complex for you, consider this:  In the Weimar experience, the price of everyday goods and services went up.  In the present GBO, fueled by derivatives and debt-piled-on debt, the financial markets where layers of paper feed more layers of paper, we might see a hyperinflation scenario where the bulk of inflation is contained within financial market, debt instruments, and the like.

Oh, by the way, if you or the folks managing your money get this wrong, your life savings could disappear.  Stuff happens though, right?  I think the von Mises folks call this the "Crackup boom."
 

Clear Channel for Sale?

Might be.  That's the word this morning - the slow growth of the radio industry is one reason the stock price has not gone up more rapidly, one would suppose. But that makes sense.  You take a Sirius look at the radio and XM'en it closely and you're going to see podcasts and empee threes gobbling up ears.

Speaking of talk shows...

Not to Rush into anything, of course, but Vlad Putin was on a talk show yesterday in Russia.  Ballsy move.  Maybe spinster Karl could get GWB a slot on Thom Hartmann's Air America show, yah think? 

The Fat-Gas Link

OK, don't go there.  This is a serious report from the Washington Post that says basically, if you're overweight, you're using too much gas in the family car.  Yup. That's because Americans are on average 24-pounds heavier than they were in 1960.  That's demographics for you.

War - Still Ugly

Humans have not been enlightened overnight - again.  Especially in Afghanistan today where up to 60-people have been killed in fighting, namely UN bombing.

Look: Up in the Sky!

It's your tax dollars - off to look at the sun as NASA launches a sun probe..

Reader Communications

Mike the author, drop me an email!  Yes, I lost something important in my email...

Not Covered Here

No, I don't care if Naomi Campbell has been arrested in London, nor do I see a big enough economic impact of any gay marriage decisions. 

But give me a good story about the battle between Microsoft's new tabbed browser IE 7.0 versus Firefox, now you're talking.  Or, the new hack of iPod-iTunes.... Or, Oracle doing Linux versus Linux...

Just so we're clear: FTP is mainstream for "follow the personalities." Around here we're FTM - follow the money types.

Wednesday October 25, 2006

Fed Stands

From the Fed - no surprise here:

For immediate release

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Economic growth has slowed over the course of the year, partly reflecting a cooling of the housing market. Going forward, the economy seems likely to expand at a moderate pace.

Readings on core inflation have been elevated, and the high level of resource utilization has the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations, and the cumulative effects of monetary policy actions and other factors restraining aggregate demand.

Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; William Poole; Kevin M. Warsh; and Janet L. Yellen. Voting against was Jeffrey M. Lacker, who preferred an increase of 25 basis points in the federal funds rate target at this meeting.

 

Slow Learners

The world is in a heap-o-trouble - and despite all the obvious signs, political leaders of every stripe always come up with the same old answers to the same old problems. The case in point today goes something like this.  First, a quick planet scan to recheck the playing field:

• One more degree centigrade, plus or minus a hot spell, and the glaciers in the Antarctic and Greenland are threatening to slide into the world's oceans. This will raise - according to USGS figures, sea level around the world by 240 ft, plus or minus an Oldsmobile. That's one solitary degree - and temps are going up by some estimates, more than than in a single year now - so next year's forecast of a "global coastal event" might be something like this.  Like the old Bill Cosby sketch went, "Noah, how long can you tread water?"  Notice the Bush family's new ranch is in Paraguay and not waterfront.  At least, not yet.

• Whether Peak Oil arrives today or next year - or has already been and gone doesn't matter so much.  What does matter is that we've eaten about half the natural resource so wasting it doesn't make sense.

• And, last but not least, the planet is swimming in excess capacity in the auto industry.  We've got more deals on more cars than you can shake a stick at ("So ya'll come on down today, we've got special financing...").  The world doesn't need more auto production capacity, but smarter approaches to transportation.  There are states where moped laws are designed by the autoists, not the "tread lightly" crowd.

So it's with this in mind that the first socioeconomic story that slaps me in the retinas this morning is the headline that "Putin says Russian to make 2 mln cars a year soon."  Well ain't that dandy?  Completing the transition from communism to complete corporate sell-outs in what, about 16-years? 

The tactical problem the world faces is really simple:  We are growing people too fast for resources to keep up - and instead of coming up with thoughtful solutions, we revert back to corporatist thinking as the dominant paradigm, never thinking far enough ahead to realize that if we all scramble after the same resources, it will inevitably lead to conflict because humans don't share easily with other humans, except kin, and even then, it's dicey.

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Related: Honda profits have dropped according to reports.

The Silver Bullet

"Oh, that damned People's Economist guy is a doomster," you're thinking to yourself.  "The world has plenty of options, including plentiful nuclear power."

Wrong.  in fact, DFW (not Dallas-Fort Worth, but Deaf 'ffing" Wrong.

When supply chains are stretched too tightly, there are inevitable "bumps" that cause BIG  problems. 

If you believe in the nuclear/hydrogen economy (along with believing in free lunches, the Easter Bunny, and the Almighty Dollar), you need to be watching what's happening this week up at the Cameco mine in Saskatchewan.  There, a big mine flooding problem has endangered something like 17% of the world's production of uranium oxide - and that can easily translate into a lack of fuel for the USA's heavily promoted nuclear business.

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Another curious nuclear development: Russia has delayed the completion of the paradoxically named Bushehr nuclear power project in Iran because of "technical reasons." 

Yeah, I can imagine a technical reason: Complete it and the US neocons who hold the White House hostage will bomb it back to gravel-sized pieces.  Russia is waiting for our election, then Constitutional crisis to resolve itself before completion.  That makes sense, even though they need a trip to Detroit for more than a Pistons game to get some auto sense.

Timor Temblors

East Timor (which has some decent-sized oil reserves, we notice) has been going through its own version of the web bot's "rebellion/revolution" meme.  The international airport was closed by violence which has killed two - and more than 150-thousand have  been driven from their homes by violence this year.  I must be silly, seeing oil masquerading between socio/religious conflict, behind every major clash going on in the world today. But, when I follow the money (FTM) there are the key ingredients: oil, money, power.

Madness on Bordering

While the republicorps, the Bushcrats (wild free-spenders who lied/misled us about conservative values and fiscal responsibility in order to get elected), and the democorps continue their self righteous hoodwinking of the American public on immigration, we see that the US has announced immigration restrictions. Thank God/Universe we get to vote in a couples of week.  Or will we?

Canada Remains Free

Here's an encouraging headline for Independent Constitutionalists (like us).  "Terrorist motive immaterial, judge says, strikes anti-terror act definition."  Is this something which would be important here in the USA, where our Constitutional Rights have been abrogated by "anti-terror" enactments of the Bushocratic CONgress?  You bet - it would mean the basic rights of free peoples would be restored to "innocent until proven guilty" instead of what's now the Napoleonic/Bushocratic opposite. 

But alas, no such developments to report.  Because the Court involved (deserving of being capitalized, I might add) is in Canada.

Again, it's important to realize that I am not "pro-terrorist."  I am extremely anti-terrorist.  But like Pappy used to tell me,. "Be extremely wary of laws that try to substitute for good Police Work and steal your Rights."  You mean like the disappearance of habeas corpus?

Speaking of which -- open up the Orange County Register today and read the editorial reviewing the Military Commissions Act of 2006:

"The commission act's suspension of habeas corpus, then, is probably unconstitutional on its face. It may also be unconstitutional in that the present emergency does not meet the constitutional test of rebellion or invasion (when civilian courts might not be capable of operating). For better or worse, our civilian courts are operating at full throttle and could no doubt handle a few dozen trials of alleged terrorists, so the need for a bill establishing military commissions at all – let alone suspending habeas corpus – is far from evident. Ordinary military courts martial might also have handled the job.

Apparently, however, both civilian courts and traditional courts martial are too wedded to traditional procedures and protections for this administration. The new act permits the exclusion of a defendant from his own trial (if classified evidence is being presented) and the admission of hearsay and coerced evidence.

Critics who see in this act the beginning of the end for American liberties may be overstating the case. But not by much. "

I'm just thrilled that there's a reliable newspaper in Orange County understands the threat to what the Framers intended in the Constitution and haven't been overwhelmed with the alarmist hype sounded by the neocons. Next thing you know, I'll start holding out hope for California...

Europe's Coming Recession

We aren't looking for much movement in the market until after the Fed makes it official today and takes a pass on moving rates.  Several reasons for the pass: On the upside, raising the Fed rate would signal that inflation is a bigger fear than claimed by the Bushocrats.  That'd be a no-no this close to the election.  Lowering rates would message that "we're in deeper doo-doo than we thought" - and again, this close to an election, that'd be a no-no.

But there's a lot of discussion today in the financial press about the likely drop in the Euro once a new report on German investor confidence comes out.  If it's down a fourth month in a row, the Euro could drop, and the prospects for a European recession increase.

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Watch list: Look at oil inventory data due out today.

Refinery Outage

People in India may soon have cooking gas refinery fire.

Layoffs

Bombardier is axing 1,330 jobs due to a lack of sales for their regional jet products.  Think oil costs here.

Cost of Higher Ed

Up again, and faster than inflation, we notice.  Don't need schooling to figure this one out. To my way of thinking, distance learning is a good price containment move - and state licensed but non-accredited schools often have value.  When it comes to "accreditation" most higher ed faculty types will argue it ensures quality of curriculum.  But unaccredited (state licensed schools) also have their curriculum reviewed by the licensing state.  Meantime, the business office people know that (wink, wink, nod, nod) accreditation really means access to federal loan and grant programs.  And let's not even go to the transfer of credits game when schools don't recognize one another's credits in order to maximize revenues...accreditation by itself doesn't assure transferability of credits. That's a whole different higher ed sport called "articulation agreements."

It boils down to whether you're buying knowledge on the one hand, or an anointing on the other.  Some of the most knowledgeable people I know haven't been anointed by the accredited higher ed system.  The People's Economist calls this the smart/schooled paradox.

Tuesday October 24, 2006

The Sheep Herding Problem: Carrot or Stick?

Pretend for a moment that you are a highly placed "elected" official who emerged "victorious" from the 2004 presidential debacle.  There you are, sitting in a bombproof basement conference room, with virtually all the trappings of power at your fingertips. 

Being a former Master of the Universe in the corporate world, you have a great handle on the oil situation, and realize that without an assured supply of oil, America would be in for a gut-wrenching change of lifestyle - one that would cause grief to your banker friends and corporate buddies.  Oil and interest, you know full well, fuels the corporatist paradigm.  No, you conclude, the best way to keep the most people happy, is to keep the game going a bit longer - while gently driving voters to put as many of your buddies back in office for another term.  But how would you do it?  Carrot or stick?

One way might be to appoint an "insider" from a large stock brokerage firm like Goldman Sachs - someone who is expert at running markets - as Secretary of the Treasury.  With someone like Henry Paulson at the helm, only the truly cognizant would understand his moves to reenergize the President's Working Committee on Markets (a/k/a the Plunge Protection Team).  The few astute enough might be able to comprehend, as Gary Dorsch of "Global Money Trends" writes, "How does the US Dollar Defy the Law of Gravity."  Fewer still might take the time to consider Jeff Saut's "An Eerie Stillness" piece which appeared yesterday at Minyanville and offers in part that:

"It’s also worth noting that we’re not conspiracy theorists, believing that Lee Harvey Oswald acted alone and that George W. Bush really did win the election. Yet, there remains an eerie “bid” in the equity markets since those July lows. For example, markets typically rally, then correct by about one-quarter to one-third of that rally’s point gain, before beginning another rally phase. After that phase, they again correct by one-quarter to one-third before re-rallying. This, however, has not been the case recently. Indeed, every time it looked like the indices were about to correct, mysterious buyers materialized in the futures markets. Those “buyers” tend to widen the futures premiums so far above the cash markets that it attracts arbitrageurs. The arbs, in turn, short the futures and buy the appropriate baskets of stocks. That operation allows the arbs to “lock in” the spread between the futures price and what they paid for the basket of stocks, assuring them a risk-less profit and, in the process, driving stocks higher."

And while that's going on (arbing up the indices), there's the growing movement to securitize nonperforming loans (NPL's) and magically ("Presto!") turn otherwise diseased paper into brand new asset-backed securities (ABS's) and use them as collateral - a financial sweeping under the rug worked out in the wake of Japan's real estate collapse since 1989. Sure, housing collapses anyway, but the ABS's help the market survive.

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But to return to the problems of our "elected official" in the bombproof conference room, let's consider the present state of affairs.  Latest polls show that the voters are lacking confidence in either political party - thinking as reflected in a new CNN poll out today that neither party has a plan.  Well, doggone it, those voters may be onto something.

So you weigh the options.  What are the "events" that could be manufactured here in the final days leading into the election which could drive the sheep....voters if you must...to the polls in sufficient numbers, in case the republicorps quietly orchestrated "Anti-fraud laws" don't keep enough of those darned independent and democorps from voting?

The dynamic here is interesting to watch:  On the one hand, seasoned observers will argue that when all is said and done, "It's the economy" - and with the Dow setting records, the Bushocrats owe Henry Paulson a beer or two because he'll carry the day.  Then too, the administration - at least for the next few weeks - will drop the "stay the course" rhetoric, hoping that voters will somehow read "flexibility" into Washington's oil plans for Iraq and Iran. Maybe that'll fool a few servicemen and their families...then again, maybe not.

Is there a final carrot, or stick, that could be applied to the sheep?

• An attack on American soil by "terrorists" would be immediately suspect - but al Qaida has already tried that in the Madrid train bombings a while back (2004). Such an attack would be immediately suspect.  Besides, it didn't work in Spain.

• The US could park an  aircraft carrier group off Iran and goad them into shooting at us - a sort of modern day Gulf of Tonkin spin.  But Iran's been yelping about plots long enough that it might seem contrived if the US did something that obvious.  And Israel's got its problems now with overflights of Lebanon - and jeez, this could end up with Israel duking it out with the UN. Although they could launch on Iran in a NY second.

• There could be a massive roundup of illegal's - there's a new poll out this morning saying the public supports a crackdown on illegals - yeah, maybe something like that would be an attention getter.  And it would be "safe."

But with the second cup of coffee in the bunker, the problem of dilution of message comes into focus.  Immigration has all of a sudden popped up everywhere; there's been a rash of "illegal immigration stories. Russia this morning is vowing to tackle illegal immigration - a strong message to Georgia. Blurring out the borders of the message, Australia is working illegal fisheries, and even Iran has illegal immigrant issues. Maybe British Home Secretary John Reid is onto something with his call for EU immigration limits.

The problem of whether to apply a carrot or a stick is getting easier by the day.  American voters are increasingly skeptical of the upcoming elections - and reports from Houston TV, from

Maryland TV, from CBS, and even Computerworld sound an early warning on electronic voting machines.  Maybe those "time monk" guys at www.halfpasthuman.com will be right again - a Constitutional crisis of a month or so following the "elections."  What they don't know, huh?

Because voters are getting more locked into their positions - and they're already hearing the Federal Budget may be as much as six times larger than reported publicly (thanks to off books accounting) and the continuing trash of Iraq, the stick is more useful now than the carrot.  After all, bad news travels faster than good - and time's running out quickly.  An "attention-shifter" is needed - and like those "time monk" guys figure, it should be literally a big last minute thing - perhaps as late as November 6th. Maybe even disrupt or postpone elections if big enough.

---

Well, the election plans are set and everything planned is in play.  So as VP, you'd sit with the coffee and ponder the really important stories of the day instead of worrying about an election whose course is already set.  "Halliburton expect to spin off KBR by April."   Ah, some good news for a change, you think...maybe that will pay for a ranch up the road from George's new place in Paraguay.  Paraguay's fresh water Guarani Aquifer is after all, one of America's new strategic interests.  Especially now that Japan is helping to finance Iraq's oil redevelopment and expansion.

Flat Trading Seen

Our outlook for trading is thin and choppy ahead of the Fed decision due tomorrow.  Today we'll have to be satisfied with the release of the Richmond Fed manufacturing Index.

Unhappy Anniversary

Protesters and police clashed today on the 50th anniversary of the Hungarian rebellion of 1956.  Hmmm...there's that rebellion/revolution meme again, huh?

NK Not Repentant

China has denied a report that North Korea has apologized for its recent (likely plutonium) bomb test. 

Mexican Blow

No, not that kind - you've been watching too many Miami Vice reruns.  Mexico is boarding up windows and such getting ready for Hurricane Paul.

OJ's Book

11-years after his high profile trial, OJ Simpson's new book is bound to be controversial (and worth the reported $3.5 million he's being paid for it) because it reportedly outlines a hypothetical motivation.

Independence Journal: Coming Soon

We expect the launch of the Independence Journal this week, or next.  Right now I'm leaning toward launch on Election Day - which makes a lot of sense. That will come up at www.independencejournal.com - and is on a completely different web server and ISP.  We experienced one of those extremely rare three-hour outages on our new provider last week (Thursday) so yes, even collocation centers have issues now and then as any (yet to be outsourced) IT whiz will tell you.

Last week's column is located here.                       The master library back to 1997 is here.

October 23, 2006

Electioneering Week

As this week begins, the markets are seemingly focused on brining about the decline of gold as the paper money love-fest that is fed by repackaged non-performing debt is expected to continue driving the Dow frenzy further into the 12,000 range.  That's high enough for all republicorps to claim "It's the economy, stupid!" and not look like complete morons - unless you know about inflation.  As explained here many times, the Dow really needs to be somewhere north of 14,000 to have a legitimate - inflation adjusted - new high on the line.  But it isn't there and the other indices are making sucking noises (especially if you managed to buy in at the 2000 top for most).  Nevertheless, that won't keep the fraudsters from making grandiose claims. Keep your thinking cap on.

Election Week Covers

There are two magazine covers to ponder this morning as the coffee goes to work (with you presumably following at a safe distance):  One is the cover of Rolling Stone which explains how the gang of you-know-whats in the District of Corruption has managed to build a record as the "Worst CONgress Ever - in five easy steps, figures RS.

Another cover to be aware of is Barron's claim today that the republicorp will hang on to both the House and Senate - and this may come as a surprise to many.  The free preview of the Barron's article doesn't give nearly as many details as the news services covering the claims.

---

A lot of sites have popped up around the net in the past few weeks getting behind the idea of voting absentee - like this one, for example.  Why vote absentee?  There are several cases around the country (click here for a smorgasbord of stories) of republicorps quietly purging registered voters from the rolls for one reason, or another.  My own thinking is a little dark on this - figuring that if they can change the voting machine outcome through backdoors in the software, a little thing like losing a paper ballot ought to be easily done, too.  Mach nichts.  The lessons of Oaxaca aren't that old. 

Mexican Grandstanding?

A couple of other good pre-election electioneering that has been brought to our attention is the likelihood this week that the Rove-directed spinsters will orchestrate a massive crackdown on illegal immigration this week.  Here's the tip:

"More about the move on the illegal's in the US. This is a repubcorp thing.  As it stands now, look for a highly visible, high media, move on illegal's, seven to ten days prior to the election. Of course its just grandstanding and will quickly fade after the election, if they go ahead with it at all. The whole vote grab may be abandoned in favor of the "Citizenship for Service" idea. It will all come down to how desperate the Repubs. feel as the election nears. Right now my bucks are on "YOU fight the ****** war, we make you honorary **** ** man".

The more ominous thing, that you never hear about, is the deal Mex. struck with China. As I said the US has just been waiting for Mex. to crater, but now Chi. has struck a deal with Big Mex. to intervene and prop them up to keep the gringo's out. There's more, but not for the internet. "

This is a two-edged sword for the Bushocrats to be messing with.  On the one hand, there's a lot of votes to be had by cracking down on illegals who have taken jobs from majority folks, but on the other, lots of headlines about how food prices may go up and availability down due to laborer shortages. 

If my sense of tactical Rove is right, what we should see before the elections will be a series of sweeps on illegals in big urban areas and relatively little enforcement in rural areas. Care to bet on whether this materializes?

That Distraction in Iraq

Of course the reason for a crack down on illegals (or some other political hype)  is that it's a relatively safe thing to do.  It will all be orchestrated as an attention-shifter away from events in Iraq.  Not to sound too crass about this (like that's possible), but the war has been going horribly for the Bushocrats.  For one this, this weekend there was a ton of speculation on the web that an explosion at a US ammunition dump in Baghdad may have killed many more than the 14 reported.  Cover-up is the central contention.

Tony Blair picks up the "don't cut and run" Bushocrat jingoism when he tells Baghdad's deputy prime minister that the Empire will "hold its nerve" in Iraq.  And because the guy he's talking with is US-backed, the "cut and run" jingoism is rolled out in response.  The point of the stories in the media?  H A pre-election hypnotic chanting of "cut and run" so that it sinks in at the preconscious level.  Good psyop  and/or advertising tactics. Repetition Repetition Repretition

That all aside, the US Death Toll for October stands at 86 - and the month isn't over.  Another 15 Iraqi police recruits were killed on Sunday, to boot.

To bottom line you, the rumored Rove plan for the illegal immigrant round ups would be a good diversionary attempt - to shift public thinking a little closer to home while our sons and daughters are stuck in the desert. 

Pumping Iraq

As this whole war has been largely about oil, we note in passing that Iraq oil output is now reported to be higher than before the war, which might seem good news on the surface, until you read on and find the Iraqis (that's US-backed Iraqis) are going to the Japanese looking for investment in oil exploration and production facilities.  Japan, one of the major beneficiaries of the North Slope oil can be expected to ante up: They need to maintain reliable oil or their industrial economy will imploded. 

A record Dow (again, fueled by securitized nonperforming loans) and a faux crackdown on illegals, wink, wink, nod, nod, that ought to keep people from voting the BIG issues. Loss of freedoms, among them.

Oil and Gold

Oil is leading the way lower today - in small part because of the US progress on squeezing black gold out of Iraq, but more centrally because of growing skepticism that OPEC will really cut its production.  Seems everyone in OPEC is willing to give lip service to cuts, but each of the oil producers wants to see someone else make the first move.

Fed Week

On Wednesday afternoon, the Federal Reserve (which is neither - it's a bankster owned operation masquerading for people who don't know its history) is expected to announce no movement on interest rates. While there's a small chance of a surprise, we don't expect anything this close to an election.

Canal Route

Sound like a dentist dyslexic?  Course, of not no.  No, it's the outcome of voting in Panama where a massive expansion of the Panama Canal has gained voter approval.

Drop those Flowers

Security-mindedness is one thing, but we were shocked when a reader sent us this:

"Hi George,

I recently looked at an application for a Master Gardener program from UC Extension. Applicants must agree to be "fingerprinted and pass a US Department of Justice screening process".

This? For a *gardening class*? What do they fear? That we will steal worms?"

You got me...

Rebellion/Revolution Meme

Story of the day in the meme:  Hungarian government dispersed protesters prior to the 50th anniversary of the Hungarian Revolution in 1956 against the communists. 

Which we note are being imitated by folks in the US now!  Big Government, wild budgets, neighbors spying on neighbors, government control of schools, history, crack downs on freedom to travel, higher taxes, only one Party, rigged elections.  Yes, it almost sounds like communism has just moved West I'm sure I'm missing something.

Animal Farm

Elaine and I are the proud owners of three new Rhode Island Red chickens.  Pullets and about as month from beginning egg production.  Figure three chickens is about all our cholesterol levels will support, but it's sustainable protein - and with the world coming to a protein shortage in the near future, driven by things like Australia's drought.

Killer Drought

Speaking of which, suicides among farmers in Australia are WAY UP says a report.  And it will cause an uptick in inflation says Oz's Finance Minister.

Bush's Paraguay

More details about the Bush Ranch II - the one the for-now president is buying in Paraguay.  We have conveniently installed 400 US Marines in Paraguay on your dime, thanks.  You getting the picture here?

News from Elliott Wave International

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On to Our Chart!

Instead of our customary chart, this week you get a free peak at one of our other charts from www.peoplenomics.com - this is our "Global Markets Equally Weighted" chart:

Write when you get rich,

George Ure, The People's Economist